Mutual fund investments are a popular choice among many investors for their convenience and potential for solid returns. To truly maximize these returns, it is essential to track and correctly manage your mutual fund investments. This article presents specific practices to help effectively handle your investments with an emphasis on dsp mutual fund and motilal oswal mutual fund.
Start by understanding your investment objective aligning with the specific mutual fund’s goals. Knowing why you invest in a certain mutual fund, makes tracking and managing your investment easier. For instance, the DSP mutual fund is known for its long-term wealth creation across various market capitalization, while motilal oswal mutual fund is often chosen for its diversified equity portfolio.
Keeping an eye on the NAV (Net Asset Value) is another best practice. The NAV is the market value of the securities held by the fund divided by the total number of units. For example, if a mutual fund holds securities worth ₹100 crore, and there are 10 crore units, then the NAV will be ₹10. Watching the fluctuations in NAV can give you an indication of your fund’s performance, allowing possible corrective action.
One of the often-overlooked tools for assessing the performance of your mutual fund investments is benchmark comparison. Benchmarks act as a comparative guide for how well or poorly a mutual fund is performing. For instance, if your chosen benchmark is NIFTY 50 and it delivers a return of 10% while your dsp mutual fund or Motilal Oswal mutual fund is only delivering 7%, it might be time to review your investment.
Aside from checking NAV and comparing benchmarks, one should also look into portfolio holdings and sector allocation of their mutual fund. This can give insights into the diversification of your mutual fund and its risk level. A portfolio heavily invested in a single sector is risker than a diversified one. Understanding this is crucial in managing your investments.
Additionally, do not get swayed by short term market volatility. Mutual funds, particularly equity funds, are best for long term investing. The principle of ‘Rupee cost Averaging’ helps you benefit in the long run by mitigating the risks associated with market volatility.
Regularly reviewing your mutual fund performance isn’t sufficient. Adjustments may be necessary for changes in personal financial status, investment goals, fund performance, and market conditions. To maximize gains and minimize losses, one must be proactive, not reactive.
In conclusion, tracking and managing mutual fund investments effectively require both knowledge and regular maintenance. Remember, an informed investor is a successful investor.
Disclaimer: Please note that mutual fund investments are subject to market risks. Always read all scheme related documents carefully before investing. Investors must gauge all the pros and cons of trading in the Indian financial market and take professional advice if necessary. Past performance is not indicative of future returns.
