Mutual Fund Basics

While making regular investments is a healthy financial habit, it is prudent to set aside some amount for meeting any financial difficulties. Most of the financial advisors will advise you to hold an emergency fund of around six times your monthly expenses to meet the contingencies of life.

What is gold ETF?

A gold Exchange Traded Fund (ETF) is an investment option that tracks domestic gold prices. A single gold ETF fund unit will be equal to 1 gram of gold.

It is rightly said that investing is an art. While many investors know ‘how to build a Mutual Fund portfolio,’ but the real need is to know ‘how to build an ideal mutual fund portfolio.’ This article will aim at guiding you about constructing an investment portfolio that suits your risk profiles and your financial goals.

Prudent financial planning involves listing down the financial priorities and then steadily working towards achieving the financial goals in the desired time frame. While you may have already taken your first step towards investing towards a healthy financial future by registering a Systematic Investment Plan (SIP), it is equally important to review the investment periodically. The performance review of the investment portfolio would allow you to align your financial priorities and financial goals.

Systematic Investment Plan (SIP) allows you to invest a fixed amount into mutual fund schemes on a pre-determined periodic frequency. You can instruct the bank to auto-debit the from your account specified dates and invest in the pre-specified mutual fund scheme. This investment cycle happens automatically on a recurring basis irrespective of the market condition. This helps an individual to consistently move towards creating an investment corpus and take a step closer to achieve his/ her financial goals. 

Just as it is important to start investing early, it is paramount to review your portfolio periodically. Regular assessment allows you to review the performance of the various funds and accomplish your financial goals. Here are four crucial parameters against which you may compare your mutual fund portfolio

Financial advisors will generally advise you, “do not keep all your eggs in one basket.” Such an investment action is denoted as diversification in the parlance of personal finance. Diversification refers to making an investment portfolio across different investment segments and asset classes to reduce the overall investment risk. 

Retirement is often seen as the second innings of life. That is the time when you enjoy the luxury of time, while you do not have any official meetings to attend or timelines to meet. While it may be an extended vacation, you may be in for many surprises, if you have not planned for it. Retirement planning must be done prudently and systematically so that you don't have any financial constraints while planning to fulfil your pending dreams and aspirations after retirement.

We are already in the last quarter of the financial year, and most of the employers will be pushing for the proofs of your tax-saving investments. With the increasing awareness of mutual funds as an investment option, Equity Linked Savings Scheme (ELSS) funds are also emerging as the preferred option for tax savings.