How To Discover The Genius In You And Get Better At Investing In MFs
Jul 03, 2019

Author: Aditi Murkute

(Image source: Image by Gerd Altmann from Pixabay )

Investing has become the new norm for these following reasons:

 - Escalating inflation,

 - Early retirement planning,

 - Increase in life expectancy of an individual.

But, are you doing it in the right manner?

I believe, most people probably aren't.

Here's why....

Either you are following someone else's advice (friend or family or neighbour) to invest in extremely conservative investment instruments like the bank fixed deposits, recurring deposits, NPS. Or are investing in extremely risky assets like equities. Some may even choose an insurance plan (ULIPs) because it is recommended by a bank.

[Read: Beware Of Free Financial Advice, It Might Bomb Your Financial Wellbeing!]

However, successful investors understand that for their financial wellbeing and investments, financial planning is an individual, personal exercise. The adage holds true, "One man's food is another man's poison."

So, how do good investors invest?

  1. Set S.M.A.R.T. financial goals - short term, medium term and long term, and believe in goal-based investing;

  2. Calculate the amount of money they will require to achieve each goal;

  3. Create a financial plan to achieve each goal;

  4. While creating a financial plan, consider their risk profile, financial conditions, and investment horizon before the goals befall;

  5. Believe in value investing;

  6. Invest prudently in businesses that they understand to create a diversified and robust portfolio in a systematic manner;

  7. Do not wait for the 'right' opportunity to invest, but invest systematically (preferably via SIPs in mutual funds); 

  8. Stick to the plan diligently;

  9. Review and track the funds' performance in alignment with the goals.

One aspect that makes good investors geniuses at their investment game is common sense. Along with common sense, they understand that investing has to be done thoughtfully and systematically. Besides, they know that to get better at their game they have to invest in valuable advice as well.

[Read: 7 Lessons From The Great Investment Gurus...]

And they follow that up with these points:

  • Good financial habits like controlled expenditure;

  • Avoiding any debt burden (loan or credit card);

  • Saving to invest mindfully;

  • Not following the herd/noise;

  • Not getting swayed by their emotions;

  • Seeking guidance; and

  • Doing their own research to know the level of risk-adjusted inflationary returns they can earn by choosing an appropriate mix of various asset classes.

[Read: Are You Paying Attention To Your Financial Fitness?]

Equities are extremely volatile in nature, although they do provide better returns in the long run. Allocating some portion of your funds to these funds can definitely help in wealth accumulation, albeit at high risk. To mitigate the risk, you could add debt investments and gold to the portfolio.

In my opinion as a financial adviser, Mutual Funds are the most competent and preferred choice for these genius investors for the reasons given in the picture below:

stragicy


Being highly diversified, you can customise your mutual funds portfolio to suit any type of risk appetite - aggressive, moderate, and conservative.

The portfolio of an aggressive investor tends to be heavily invested in equity funds (Small-cap funds, Mid cap funds, value funds); whereas the portfolio of a conservative investor has little exposure to equity funds (large cap funds).

Now here's the trickiest part!

Selecting the right mutual fund is extremely crucial to the success of any type of investor's portfolio. It needs to create wealth for the investor. Ensure the suitability of a scheme to your financial plan.

Choosing the best mutual fund schemes is not child's play. It requires comprehensive research on the qualitative and quantitative parameters of the fund. Once you have assessed both these aspects, selecting the winning fund becomes simpler. If you do not have the necessary skills and time to comprehensively research, you can reach out to PersonalFN's SEBI-registered investment advisers on 022-61361200 or write to info@personalfn.com.

PersonalFN's investment advisers will effectively serve as Financial Guardians and help you ascertain your risk profile, chart your asset allocation accordingly, select suitable investment avenues including the best mutual fund schemes, and handhold you in the journey of wealth creation and accomplishing your financial goals.

To select the best mutual fund schemes, PersonalFN has a comprehensive mutual fund research process in place to scrutinise all quantitative and qualitative parameters extensively.

PersonalFN's research team, with their years of experience and extensive knowledge in mutual funds, has gone to great lengths to find out the potentially best and consistent performers across market conditions.

"I am obliged to PFN for educating me in management of personal finance. I have designed my MF portfolio taking guidance from PFN. I appreciate prompt responsiveness of PFN team to subscriber queries, and their approach to take onboard subscriber requests and feedback. In particular, I liked research reports for a couple of funds which clearly guide investors not to invest in spite of high returns, due to underlying risk and doubtful sustainability of returns in the long term. This differentiates PFN from other MF research services."

~ Rasesh Choksi

This testimonial is proof of the extensive research that the team conducts for the welfare of our esteemed clients.

To conclude

Your perspective on investments separates a successful investor from an unsuccessful investor. Moreover, when successful investors seek financial advice from ethical, unbiased, and experienced research firms, they can become genius investors who create wealth and achieve financial freedom.

Editor's Note: PersonalFN offers you a great opportunity to own an Ultimate Strategic Portfolio, if you're looking for "high investment gains at relatively moderate risk".  


​Consider PersonalFN's premium report: The Strategic Funds Portfolio For 2025 (2019 Edition). In this report, PersonalFN will provide you with a ready-made portfolio of its top equity mutual funds schemes for 2025 that have the ability to generate lucrative returns over the long term. Subscribe now!



Add Comments

Financial News. Simplified


Knowledge Center


Money Simplified Guides (FREE)


Mutual Fund Fact Sheets


Tools & Calculators