Mutual Fund Long Term Investment Strategy | Khasnis Prime Wealth

 

While the investment has definitely got new dynamics with diverse options, mutual funds, in particular, have found a place in the regular investments of a millennial. Having said this, we still need to gain a deeper understanding of how mutual funds work in the wealth creation process.

Going through the zillion resources on the internet, we might have a rough idea of what mutual funds are and how they work, but we are going to burst the bubble about long-term investment strategies in mutual funds. 

 

Long-term investments help an investor to secure funds for the future. The best part about long-term investment is the flexibility it offers with respect to the size of the fund one invests.

You can kickstart with a small sizable corpus and achieve desirable goals. For example, if Mr. ABC is 25 years old and starts investing in mutual funds SIP with 5000 INR for over 35 years. The magical power of compounding the invested amount of 21 lakhs can give him returns up to a whopping 7 crores! (Considering a long-term investment giving him returns at approx 15%-17%). The maths of compounding is enough to understand ‘why to invest for a long term?’ 

 

Here are tips for building a strong long-term portfolio in mutual funds.

 

1. Define the ‘long term’ as per your goals

The dynamism of long-term investments varies mostly because it has a different meaning for everyone. For example, for someone, it can be retirement while for others it can be child education or marriage. Therefore, you can build various portfolios separately based on your needs. 

 

2. Research and analyze various investment options

There are gazillion long-term investment options and one should conduct extensive research based on returns before investing. Equity funds have a higher risk-reward ratio than debt funds, even under the broader categories, there are at least 10 different funds with varying natures. 

For example, within equity mutual funds, a small-cap mutual fund is riskier than a large-cap fund. One can take the professional help of a mutual fund advisor to guide you through the analysis and choose the best investment options. 

 

3. Analyze your risk appetite

There are many funds that are high risk while some are low or medium risk. You need to thoroughly understand your risk levels before you choose a fund you want to invest in. A proper discipline in the investment based on your risk appetite only proves to be fruitful in the future. A financial planner can also help you understand your risk profile better.

 

4. Opt for a customised long term investment strategy 

The long-term investment strategy is unique for every individual and hence mirroring strategy might not work best. Since you are thoroughly aware of your risk level and long-term goals, it becomes easier to decide how much money and which fund to invest. Your long-term goals can be varied: retirement, higher education, marriage, buying a house, children’s education, and more. Invest in funds accordingly.

 

5. Diversify portfolio for better returns

It is a golden recommendation to continuously diversify your investments. Diversification helps you to get better returns and exposes you to calculated risks. Even if you have a very high-risk appetite, having 100% exposure to risky products may land you in trouble. It is also not a wise decision to have a heavily skewed investment portfolio. It helps to maximize returns over a longer time frame.

 

Some of you might find a hard time trying to follow the above recommendations and that’s where we help you. At Khasnis Prime Wealth, we do the analysis of your investments and align them with clearly defined financial goals to advise a customized investment strategy for you.

Name: Rahul Milind Khasnis
Firm Name: Khasnis Prime Wealth Pvt. Ltd
Mobile: 09552548080
Email: rahul@khasnisprimewealth.com
Website: https://www.khasnisprimewealth.com/