The ABCs of Mutual Fund Investing

Everyone dreams big, but only a few take the steps required to fulfil those dreams. Investing through SIP is the simplest way to reach that dream. Starting mutual fund investments involves a series of steps to ensure you make informed decisions aligned with your financial needs and risk tolerance. It is a great way to grow your wealth over time. How do I start mutual fund investments? Here's a step-by-step guide to get you started: Define Your Financial Needs: Clearly define your investment objectives. Are you saving for retirement, a down payment on a house, education expenses, or general wealth building? Your needs will influence your investment strategy. Assess Your Risk Tolerance: Before you start investing, it's important to understand your risk tolerance. This is the amount of risk you're comfortable taking with your investments. If you're not sure what your risk tolerance is, you can take a risk assessment questionnaire or talk to a financial advisor. ...

A popular mantra of the stock market is “buy low, sell high”. However, when push comes to shove, this strategy is hard to follow. Investors in general are irrational and are driven by their emotions and biases. When stock markets plummet, there is a general belief that markets will keep plummeting and vice versa when markets are rising, reflecting the market psychology. This generally happens when investors fall victim to their own emotions. There’s an evergreen saying “Financial markets are driven by two powerful emotions, greed and fear.” These emotions are so strong that they can cause harm to not only your personal life but can affect your   financial health and wealth-building   process too. It is these emotions along with biases and rumours that cause bubbles in the market and eventual market corrections. In technical terms, this is called the fear and greed cycle. Investors who can behave rationally and control their emotions when the entire market behaves irrationally,...