How Students & Working Professionals Can Achieve Their Financial Goals Through Mutual Funds

By Subodh / October 22, 2015

No matter what your academic qualification is or what type of job you are doing, investing for the future becomes necessary. Whether one is single or has a family, this is a prime need. Nowadays, people think of saving for old age even as early as in the early 30s and some people do so even before entering professional life! There are so many expenditures lined up as you move ahead in life and career. From tax returns to education of kids and buying a property, the list seems never ending! So, making future ready investments makes sense.

Mutual Funds

Options For Investment For Future

There are many options for working professionals opting for investment to safeguard their future. While some people choose to invest in shares, others invest in real estate properties with an intention to sell in the future. However, a mutual fund is a noteworthy option for securing future and achieving financial goals.

Nuances of Mutual Funds

Mutual funds are generally deemed as one of the safest investment options for people. They are catered to suit diverse investment needs as well. People with modest financial capacity can opt for the mutual funds.

Investing In The Right Mutual Funds For Future Security

Not all mutual funds are same or offer same returns and so you need to pick the right ones matching your financial goals.

People with modest budgets aiming for a lump sum at retirement should opt for a single fund plan. They should choose a fund maturing at a target date, possibly at the time of retirement.

Investing in a debt fund in your 30s is not a good step and an equity fund is not ideal when you want to buy a vehicle in the next year. Equity funds are better suited for people who can muster courage and take risks. In the long run though, Equity funds have the potential to offer high returns.

Debt Mutual Funds

Thematic or sector funds are suited for professionals who can take risks and get a focused exposure to one niche in return. The sector can be automobile, energy, FMCG etc. It is right for the aggressive investor.

Those who are prudent about asset diversification and realignment through career often opt for the asset allocation funds. They do not want to sit idle after investing once in life! Asset allocation funds let you review and modify asset allocation and tweak investment portfolio. These funds reduce stress on volatile assets. They are also called life stage funds. The investor does not need to check into asset allocation repeatedly when he chooses these funds.

Those working professionals who want to ensure their kids’ education does not suffer owing to lack of funds can think of investing in balanced funds. Balanced funds will not offer you returns as high as equity funds, but they are less risk prone too.

There are many other types of mutual fund as well, including the gold funds or ELSS funds. MIPS and SIPs are also popular among young investors these days.

Tips To Get The Most Out of Mutual Fund Investments

The below listed tips will be helpful for people willing to invest in mutual funds and reach financial goals in life:

  • It is better that you track the long term return and performance of a mutual fund and do not focus only on higher returns.
  • It is better to invest in a diversified way and it will help you cope with market changes easily.
  • Keeping a tab on the overall cost of funds is also necessary.
  • It is also important that you keep an eye on tax returns. Investing in high return funds can also ensure you end up paying more tax.
  • It is necessary to analyse the asset allocation of your funds. This will help you evade investing in volatile segments.
  • Trends in mutual fund and investment segment keep changing over time, as it is. You can stay informed about the changes and make it a habit to read web resources on such investments. There are social media groups where veteran investors share their insights. You can benefit greatly by following these sites. It will take time, but you will slowly become well adept to manage your funds and reach your monetary goals.