We all want to invest our money in a place where our investment will be safe for our future prosperity. In the last few years, mutual funds have emerged as a better investment option, where not only your money remains safe but you also get better returns than others. But even here you cannot invest blindly. The nature of all funds is different. In such a situation, everyone’s returns are also different. In this situation, it is important that whenever you invest in mutual funds, you should make a better strategy for it with diversification.
Invest in different schemes:
The first mantra of investing in mutual funds is not to invest completely in a single fund. Choose a variety of funds when you shortlist the funds. If you are starting to invest then invest in only two funds. Even if the amount is more than Rs 5000. Because investing in a single category increases your risk. For example, if you have to invest two thousand rupees every month, then you can choose large cap and mid cap funds separately.
The category may be the same but the management of these schemes should be kept separate. For example, some large cap funds invest only in big companies while some also support mid-sized ones. It is recommended to invest in 6-8 schemes across all categories in the portfolio.
Choose different categories for investment
When you invest in different categories, your risk also reduces. For example, if you are thinking of investing in three schemes then select the large cap scheme. After that choose multi or mid cap. Along with this you can also choose debt fund. By doing this, if there is a decline in the equity market, your mid cap funds may see a further decline. Similarly, when the market is bullish, there is a possibility that mid cap funds will rise before large cap funds.
All fund houses plan investments from different perspectives. In such a situation, when you invest in different schemes, keep in mind that you are not choosing all of them from the same fund house. Just as you choose different schemes, similarly choose the fund house also. You will find some fund houses that manage the schemes well. Even after this, choose a different fund house only. Invest your assets in different asset management companies. Also keep an eye on mid and small size funds.