D'Street Articles - 25 Gems for Mutual Fund Investing

25 Gems for Mutual Fund Investing

1. Diversify for investment success

2. Set your sights on building wealth slowly

3. Do your homework before starting out

4. Let time work for you

5. Emphasise time over market timing

6. Invest regularly

7. Recognise that the risk of being in stocks decreases as your holding period lengthens

8. Start investing as soon as possible, even if you must work with small sums

9. Save as much as your paycheck as you can

10. Consider painless and effi cient automatic investment plans

11. Don’t waste your time searching for elusive risk-free investments

12. Don’t allocate too large a slice of your investment pie to liquid funds

13. Conversely, don’t use equity funds for cash that you will need in three to fi ve years or less

14. Don’t try to time the market by moving heavily into cash.

15. But consider changing your equity fund mix if you are concerned with downside risk in a pricey market

16. Don’t expect good or bad times to last forever

17. Combine funds that follow the growth and value stock-picking styles

18. Don’t assume that laggard funds will bounce back

19. Don’t look at your nest egg for thrills and excitement

20. Look beyond the fund’s name to its actual investment philosophy and portfolio holdings

21. Follow a rupee cost averaging strategy if you want to ease into risky positions gradually.

22. Conversely, consider putting a large sum of cash to work all at once, if you can stand the fl uctuations.

23. Don’t own more funds than you can effectively monitor

24. Don’t expect your manager to shine in all seasons

25. Most importantly, do not worry so much about individual fund losses. Rather, assess the damage in terms of your overall portfolio. Ditto for the gains.

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25 Gems for Mutual Fund Investing

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