Here are 5 pitfalls to avoid and make your investing experience efficient.
IGNORING EXPENSE RATIO
There are many things that go into managing your money through . For example, can charge an expense ratio of 2.5% to the scheme you invest in. It is usually high for actively managed fund scheme like Diversified Equity, Multi-Cap or Sector-Specific. It is low for passive ones like Index or Fixed Income Fund schemes. It goes up if you opt for sector-specific equity schemes
FOLLOWING SOMEONE ELSE
It is important to follow your own plan and not of someone else. For example, it is often said that as you age, you should take less exposure to Equity Funds. However, if you are confident about your future income, you can continue investing. Risk is a factor of not just age but future income too.
While investing in any asset class through , you must let it grow, Invest only when you are willing to leave it untouched. Avoid a short-term outlook for MF investments.
NOT CHANGING WITH TIME
If you have set your target for a corpus or a goal, you must take your money out as soon as you meet it. This is irrespective of the state of the market. A review of the portfolio is necessary to align your MF investments with your new objectives or goals.
TOO MUCH INFORMATION
You watch television or read pink papers to gather information on investing. It is a good idea to listen to everyone. However, at times, too much information can be confusing. You are better off finding a good Financial Planner. You must discuss your ideas and reason with them.
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