What is the right time to invest a package in mutual funds?
Immediately after the term mutual fund investment mentioned, investors often relate them with a systematic investment plan, commonly known as SIP. However, if you have to know, there are other methods to invest in mutual funds that are too-metlly investment. If you have an excess of funds, then you can consider investing in lumpsum rather than choosing the Long SIP investment route. Unlike SIP investment, investing in lumpsum may require investors to regulate market time, or that is what most investors think. Therefore, it is not uncommon for investors to be confused with the right time to invest lumpsum in mutual funds. This article aims to solve the problem for you.
The lumpsum investment is an investment mode where the number of single investments is made to certain mutual fund schemes by an investor. These modes are often recommended when investors have significant surplus or corpus funds to invest in mutual funds.
Often there are myths that apply around investments in mutual funds through lumpsum investments needed to regulate market time. However, this is not entirely true. What’s more, it’s not easy to set market time. An investor usually prefers lumpsum investment to meet their short or medium-term financial goals.
The main objective of investment in mutual funds is that this investment vehicle helps achieve financial goals. So, even if you make a lumpsum investment, try to diversify your assets of your investment profile. For example, if you want to meet your short-term financial goals, consider choosing liquid funds. This investment option is endowed with relatively lower risks and higher liquidity. However, if your goal creates wealth from time to time and builds your investment portfolio, then equity mutual funds may be the right choice for your portfolio. This is because these mutual funds have historically produce a return that defeats inflation when invested for a prolonged duration. If your goal is to save taxes while generating a return of inflation beatings, then go with the Equity Saving Scheme (ELSS). ELSS Mutual Funds are a mutual tax saver that helps investors to save taxes to RS 1.5 LAC U / S 80C from the IT Law. In short, your lumpsum mutual fund investment is a smaller and insignificant part to be allocated for various types of basic funds for your financial goals. You can also use the lumpsum calculator to understand the value of your investment in the future. LumpSum Mutual Fund Calculator is very useful in planning your finances.
If you decide to advance with the mode of lumpsum investment, your top priority must protect your capital. There is no right time to invest in the market. In addition, if you are sure about investment horizons, financial goals, and risk appetite, then at any time is the right time. Investing in mutual funds requires individuals to check the imperative parameters such as the total AUM (assets under management) in the scheme, home fund reputation, investment objectives of funds, etc. Happy Investing!