Equity mutual funds: Worried about investing in equity mutual funds? Here is a checklist
Increased volatility in the stock market makes new investors extremely anxious. All the rhetoric about rate hikes and global liquidity squeeze adds to their concern. Can you do anything to soften the blow?
- Know the risk
Investing in stocks is risky. You must reject all claims to the contrary. Once you’ve invested in stocks, you have to deal with the market. That means volatility, up and down…it’s all part of your investment journey. Accept it.
- Avoid unnecessary risks
If the current market is making you nervous, you should take a hard look at your investment choices. Take the opportunity to learn more about your choices. If you are not comfortable with an investment, you should reconsider your decision.
- Don’t focus on returns
Many new investors focus solely on returns. Stocks aren’t going to deliver double-digit returns every year. So don’t devise new plans to make comebacks. Such plans will not make you rich. Most of the time you will make losses.
- Do not hold everything in shares
It may be better to diversify your investments. If you invest according to your goals, you will have a mix of debt securities and equities. This will help you understand the behavior of different assets.
- Be a disciplined investor
Don’t stop investing or try to change your plans based on market conditions. Investing consistently over a long period of time is the only proven way to build wealth over a long period of time.