Factors which affect mutual funds | Decision making in the selection of mutual fund

November 25th, 2010| Finance.

Factors which affect mutual funds | Decision making in the selection of mutual fund

Many types of mutual funds are available in the market and it would be difficult for us to select the correct mutual fund which covers our requirements within a short time. The financial need may be different in different situations and many factors would affect the financial status of a person. The factors may be capability to bear the loss, investment time, estimating the income, need of money etc. So the plan which is sufficient for one person may not suitable for another person. Everyone is to be considered separately to see which fund is suitable for a particular person. Then it would be suitable to select the correct option and to fulfill the financial goal.

Set a  Financial goal:
There will be a destination for a journey and in the same way, there would be a goal for the financial need. We should decide the financial goal by ourselves and we should know whether we want to increase the money, save the money or get income with the help of money. The goal should be responsible and this is very important factor as the age is increasing.

Working process of the funds:
We should first see the fund process before investing in any mutual fund. We should not see the effect of the fund for short period of time instead we should see its effect in a particular period during particular time. The investors should give more importance to the funds which work properly even in the downfall of the market. We should estimate the fund in the long term.

Income in the funds which reduces the loss:
We should consider the loss while investing in any mutual fund and after that we should think of the income. We need to be ready to face the losses even if the fund is giving more profits. We should select the fund which gives more income and limits the losses. The selection of the fund should be done in proper way with interest to get good results.

Maintenance of funds:
When the driver in the vehicle is driving properly, we can reach the destination. In the same way only when the management is good, we can get the income on the money invested. We should know the capability of the maintenance team before and invest the money. We can know the capability of the fund manager only when we get the money without losses in the bad market situations also. We are having the facility to invest internationally and so the funds in the hands of good investor are always attractive.

Charges and expenses in the funds:
There is no entrance charge for the mutual fund but the people need to pay 1% of money if they sell the fund before completion of one year. We need to check whether there are any hidden charges. We should check the factors 2 to 3 times which affect the income on our fund. The present market situations are at the top levels and we need to protect our funds carefully. The main point in the investment is to see that we should not be far from market and we should see that there are no losses.

Mutual fund or equity fund:
The mutual fund will be in separate departments and the people those who want profits even in the time of losses should opt the equity funds. The debt funds are the correct ones to take back the money whenever we need it. The people those who think in different way can invest in the lands, gold and they can select the funds which are given importance. The diversified equity funds are suitable for the people those who want to invest for long term duration of 25 years.

Get updates instantly regarding Factors which affect mutual funds. Enter your email address: