New Best Ways to earn good profit from mutual fund. It is common sense rather than art or science.
Mutual funds are a tool that helps normal individuals invest together in the equity and debt markets without taking too much risk. Mutual funds are created with predetermined investment objectives to suit different types of investors. More than mutual funds are created in such a way that they achieve different risk/reward objectives.
However, the right way to benefit from mutual funds is to balance both risk and earning potential. This is why identifying the right level of risk tolerance, choosing the right schemes and allocating to the right asset class remain the most important factors in ensuring the success of a mutual fund portfolio.
The first point is the right funds in your portfolio:-
When we select funds, we need to make sure that we need to have the right mix of the right funds. For this we need to keep in mind your profile and the type of fund that matches your profile. If you are a conservative investor, your portfolio composition would be different than someone who may have a different risk profile and time horizon, such as an aggressive one.
Moreover, if you have built a portfolio of different stock funds and want to invest more in stocks over time. Make sure you keep track of exposure to all the sectors the funds have invested in. We need to look at the styles, strategies and philosophies of funds of funds and fund managers.
There is a difference between the different styles and strategies of good level fund managers. Fund houses are very specific in their fund management philosophy and management style. The fund management style is further reflected in the performance of the funds they hold.
When it comes to fund management style, we have to look at the performance of their funds over a period of time. Consistent performance over a period of time is not an easy task. Few funds have been able to perform at the same pace. These funds and fund managers follow certain styles, which further become the core of the funds' philosophy
As a taxpayer Take advantage of its hidden potential:-
Equity Linked Savings Schemes (ELSS) are the best vehicle that provides an investment option that gives you an efficient and safe way to invest in the equity market and save taxes. If we take this particular fund as a product, it is quite sure to give good returns over a period of time.
Stocks have the potential to provide better returns compared to other instruments over a period of time. These equity oriented ELSS funds provide returns that can be really noticeable. ELSS have the potential to provide better returns than most Section 80C options.
One of the important features is the tax efficiency in terms of revenue earned through them. It is important to note that ELSS also aims to distribute dividend income periodically depending on the distributable surplus. Moreover, SIP in any ELSS scheme helps you save more by investing more as you save more taxes. Over long term capital gains can be very attractive and are again tax free.
Rebalance your portfolio if necessary:-
Make sure that your equity portfolio exposure to different market segments i.e. If not, you need to adjust it according to your risk profile, time frame and investment objective. You may need to scratch the portfolio a bit to get it in the right shape.
An existing investor must ensure that the portfolio does not include too many funds without proper planning and allocation. The first step to rebalancing your portfolio is to check which funds are underperforming to the limit.
For this purpose, the correct way would be to compare the performance of your programs with the benchmark and other funds in the same group. In the case of some non-functional schemes, we have to gradually remove them through the buyback process.
We need to pay attention to the exposure to different sectors in the portfolio. When balancing a portfolio, one should focus on those systems in the portfolio that achieve consistent results and have a quality portfolio.