mutual fund schemes in 2011 Tips to make the most

mutual fund schemes in 2011 Tips to make the most ; MUTUAL fund investors need to look towards 2011 with some clear objectives. This is essential for them to be able to build a strong portfolio that will lead to benefits in the years ahead. Here is a look at some steps that an investor must undertake to make sure that their mutual fund investments are systematic and in the right direction.

Invest regularly:
Investors are often lazy when it comes to making investments. In many cases they make plans to invest, but never execute them. This results in a gap between the planned and actual investment.

Thus, for example, an investor might think `I will allocate Rs 1 lakh to equityoriented funds during the year', but never does so.

One of the best ways to bridge this gap is by ensuring that there is a regular investment that is taking place. Although it is not necessary to make investments on a monthly basis, regularity is the key in ensuring that there is no disruption to the entire investment process. This becomes a good starting point for constructing a strong portfolio.

Do not run after returns:
One of the most important things that an investor considers while making an investment is the returns that they will earn. This makes a lot of investors run only after returns, which often results in making improper decisions in selecting schemes or funds.

It is very difficult to predict which fund will give the highest return going forward and looking at the past performers is no help at all.

A fund that gave a 25 per cent return last year could end up with 5 per cent or even a negative return in the coming year. So, the in vestor would be better off if they match their needs with the selection of funds in their portfolio.

Consider debt funds:
A lot of people compare mutual funds with equities, so they look at the performance of equity markets and then make their investment decisions. But there are many options available in the debt field, too, which provide a lot of options that an investor can select for meeting their requirements.

So, there is a liquid fund to park money for a very short period of time and a monthly income plan to generate regular returns and so on. In this sense, the investor needs to think beyond just equities during selecting a fund and this will be a very helpful feature while constructing a good portfolio.

Quality matters:
The only thing that matters for an individual while selecting an investment is the quality of the fund represented by the holdings because this will generate necessary returns for them. It is not important to have a lot of funds in the portfolio.

A few funds that have a good portfolio will be sufficient to make sure an investor makes adequate benefits.

Also, there is no need to focus excessively on areas such as the amount of dividend paid and the net asset value because these are only the outcome of a good performance in the fund.

All that matters is the quality of the portfolio and the manner in which it is managed, because this is the basis on which the fund will be able to generate returns. For the latest updates PRESS CTR + D or visit Stock Market news Today

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