Getting Started With Mutual Fund Investments

Mutual Fund investments have proven to be one of the best additions to an investor’s portfolio. However, getting started with Mutual Fund investments can be difficult for new investors.

We’ve all heard the phrase, “Mutual Fund Investments are subject to market risk.”. However, not every mutual fund investor understands what that means.  There are different types of mutual funds that have different risk levels and exposures to the market.

Let’s take a simple approach here and understand how we can get started with mutual fund investments. To begin with, goal-based investing with the help of an advisor can go a long way in making your Mutual Fund investments work for you. 

If you’re seeking honest & trustworthy advice, Speak to a Cube Wealth Coach for guidance. Let’s start by understanding the various types of mutual funds that you can invest in.

What Are The Different Types Of Mutual Funds?

To put it simply, a Mutual Fund is a large pool of money managed by a Fund manager. There is a variety of Mutual Funds that an investor can choose from such as:

• Equity Funds
  
  
• Debt Funds
  
  
• Money Market Funds
  
  
• Index Funds
  
  
• Balanced Funds
  
  
• Fixed Income Funds
  
  
• Fund of Funds
  
  
• Specialty Funds
  

There are over 17,000 Mutual Fund variations available in the market. An app like Cube Wealth can help you choose the right ones.

This is done by giving you access to the best mutual funds available at any given time handpicked by our mutual fund advisor, Wealth First.

Over the last decade, Wealth First has a track record that is 50% greater than NIFTY. They manage over 3000 clients and currently have an AUM of ₹7,000 crores.

How To Start Investing In Mutual Funds?

The traditional way of investing in Mutual Funds goes like this: Contact representative > KYC (not paperless) > Submit supporting docs > Invest in funds specific to the fund house/distributor. 

This seems like a long and cumbersome process, doesn’t it? Through an investment app like Cube Wealth, you can save time and invest in the best funds from the comforts of your home.  

How Cube Wealth Can Help You Get Started

Wealth Advisors can help you build a good portfolio. But their services are only available to the elite. Most regular investors can’t afford to hire full-time wealth advisors. 

Well, Cube has changed the way this game is played by giving you access to investment advice from some of India’s & the world’s best wealth advisors. All of this and more through a simple and intuitive Cube Wealth app.

All you have to do is:

• Download the Cube Wealth App
  

• Select a risk level
  

• Choose a time frame
  

• Enter the amount you want to invest
  

• Browse recommended funds
  

• Tap On Invest
  

Try Cube Wealth’s QuickSIP feature to understand which funds suit your risk appetite and build the perfect portfolio to suit your goals. 

As the world is becoming more digital, investing in mutual funds online has become very easy. To understand more about this, you can check out our blog on Is It Safe To Invest Through Mutual Fund Apps?

Are Mutual Funds Safe?

Safe is a relative term that depends on various factors such as the markets, investment objectives, and your own strategy. But here are some of the benefits and risks of investing in mutual funds:

Benefits Of Mutual Funds

1) Professionally managed: A fund manager with extensive knowledge and experience manages each mutual fund scheme that you invest it. They decide when to buy and sell.

2) Diversification: Mutual funds invest in stocks, bonds, gold, etc which reduces the risk borne by each individual investor.

3) Affordability: Mutual funds are fairly priced and on the Cube Wealth app, you can start investing with an amount as low as ₹1000.

4) Liquidity: As compared to traditional investments such as FDs, Mutual funds such as liquid funds offer high liquidity. 

Risks Of Mutual Funds

1) High expense ratios: This fee is dedicated when you sell a scheme. An expense ratio of less than 1-1.20% is considered to be safe.

2) Change in objective: This is generally accompanied by a change in the way assets are invested in and the potential returns.

3) Dilution: Investors joining or leaving a fund may have to bear the additional costs on account of dilution, which basically happens when an excessive amount of money comes in or goes out of a fund.

4) Market volatility: Fluctuations in the market impact mutual fund schemes. A good investment strategy during such times can prove to be beneficial.

Are Mutual Funds Safe? Read this to know more. 

What Should You Remember Before Investing?

Before investing in any scheme, it is advisable to think about exactly why you want to invest. A few more pointers would be:

• Get a good Wealth Coach
  
  
• Identify your risk profile
  
  
• Invest through a SIP
  
  
• Build a portfolio that matches your financial goals
  
  
• Read all documents carefully
  
  
• Evaluate your options 
  

Should You Get Started With Investing In Mutual Funds?

Creating wealth is a long term project which does not happen in one day. Even instant noodles take well over 2 minutes to get ready so always think long term and avoid schemes that promise you overnight success.

Remember to check out the investment platform yourself and also see what the existing users have to say about it. Our recommendation would be the Cube Wealth app which goes beyond a normal SaaS platform and offer.

As Mark Twain puts it, “The secret to getting ahead is getting started.”  So why wait until tomorrow when you can download the app and get started today?

Not ready to invest quite yet? We understand. You can EMAIL A CUBE WEALTH ADVISOR FOR FREE ADVICE using “Blog Query” as the subject line or SPEAK TO A WEALTH COACH by booking a free consultation call.

FAQs

1) Which is the Best Mutual Fund to invest in 2020?

Ans. You can determine how good a Mutual Fund is based on factors such as historical returns, expense ratio, fund manager, etc. This would require diligent research and keeping an eye on everyday fluctuations. You can also browse through a selection of the best Mutual Funds that Wealth First has curated for Cube Wealth users.

2) Can I buy a Mutual Fund without an advisor?

Ans. Buying a Mutual Fund on your own might seem tempting but it can be really challenging. Spending countless hours on research can be overwhelming which is why it is a good practice to consult a Wealth Coach. They are not just mere advisors but people who care about your financial well-being as a whole. You can speak to a Wealth Coach on the Cube Wealth app to learn more.

3) Which is better, Mutual Fund or FD?

Ans. Liquid funds can be safer and indeed a better alternative to FDs because there is no lock-in period and you can withdraw the money whenever you need it. In general, debt funds, liquid funds & equity funds have a better ROI as compared to FDs.