By spreading your investments across various types of funds, you reduce the risk of being overly exposed to a single market segment.
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2. Age plays an important role
Younger investors, typically in their 20s and 30s, have the advantage of time, allowing them to recover from market downturns.
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3. Investment objective
Your objectives could range from retirement planning to funding your children's education or simply wealth accumulation.
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4. Opt for SIPs
SIPs allow you to invest a fixed amount regularly in a mutual fund of your choice. This method not only makes investing more manageable but also offers the benefits.
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5. Funds with lower expense ratio
Expense ratio is annual fee charged by fund house to manage your investments. A lower expense ratio means more of your money working for you, potentially leading to higher return.
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6. Keep a regular track
Investing in mutual funds is not a one-time activity; it requires regular monitoring and adjustments. Once you have invested, regularly check the performance of your funds.