Mutual Funds for Beginners – Old lessons for new investors


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The rising popularity of mutual funds has got more investors interested. They are now asking questions and making comparisons to other investment products. Mutual funds for beginners is a comprehensive list of resources for  new investors  to clear doubts and provide answers to questions.

For others, this is a good recap of what you have known. Expertise is all about repetitive practice.

Let’s begin with the basics. Here are 21 facts that you must know about mutual funds.

Mutual funds for beginners – 21 facts you must know

You have been watching your friends / colleagues investing in mutual funds / stocks. You also realise that you need to plan for a better financial future. You are ready to make your first mutual fund investment.

Your first mutual fund investment – Why, what and how?

What was the original purpose of Mutual Funds? What problem do they solve?

Revisiting the purpose of investing in mutual funds

Finding a good mutual fund scheme, relevant to your needs, is like finding a needle in a haystack. There are more chances of doing it wrong than right. Here’s what you should not be doing.

How not to select mutual funds?

If you have ever read or heard a mutual fund advertisement in print or radio or TV, the final words are – “Please read the scheme information document carefully before investing.”  Really, but how?

How to read a fund factsheet?

A new investor can tend to look at lower NAV as a signal for a good mutual fund. Nothing can be further from the truth. This is a big myth that exists around using or understanding NAV.

The Myth of the mutual fund NAV

When comparing funds, the past performance takes the centerstage for most investors. However, this needs to be done right. A trailing return or point to point return may not be a relevant number in most cases, since you are likely to invest over several years and not just one time. Let’s find out more.

Mutual Fund Performance: Rolling Returns vs Trailing Returns

Recently, there has been a mayhem in debt funds with the ILFS, DHFL, Essel Group issues coming forth. This also points out how little investors understand debt funds as a category. They are taking huge risks for little marginal gains.

This section will help you revisit some of the key facts about understanding debt mutual funds.

10 things to know about debt mutual funds

Liquid Funds – Make your cash work harder

Are Ultra Short Term Funds alternative to a Bank FD?

Year 2017 and 2018 were about the popularity of direct plans. Most investors still don’t understand it and think of it as a way to save full costs. The reality is that direct plans can provide a smart investor a way to clearly distinguish to costs of advice and the cost of transactions. Thus ensuring, no conflict of interest.

Direct Plans of Mutual Funds – all that you want to know

I still get to see questions such as “which SIP I should invest in?” The marketing overdrive in mutual funds to promote SIPs, made investors believe SIP as an investment product than a method to invest in mutual funds. Let’s understand what SIP truly is.

SIP – Understanding the Systematic Investment Plan

This is a big one. Investors believe mutual funds can bring them 15%, 20% or 30% returns. The past is being extrapolated to the future. The disappointment came in soon. What’s the right expectation on returns from mutual funds?

How much returns to expect from Mutual Funds?

Should I go for dividend option or growth option? Which is better? This is one question every new mutual fund investor asks.

Growth vs Dividend option – what should you choose?

Not just mutual funds but you can use XIRR to calculate performance of your entire portfolio. Here’s everything.

XIRR – How to evaluate your mutual fund portfolio performance?

Rajeev Thakkar, CIO of PPFAS answers some key questions about investing in mutual funds. Must read.

Investing in Equity Mutual Funds – an insider’s perspective

After you have gone through all of the above, you may still end up asking, what is the best mutual fund? Here’s my funny take on it.

Best Mutual Fund – The Funny Money Show

After you are done with all, you can now start building your own winning mutual fund portfolio. Here’s a step by step guide. 

The post Mutual Funds for Beginners – Old lessons for new investors appeared first on Unovest.

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