Define Your Investment Goal

By Author: Mutualfunds
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SIPs (Systematic Investment Plans) aren’t a new concept to people who have been investing in the market. It has been of great assistance to people in practising financial discipline and hand in hand also have been a goal achiever. Keeping in mind the budget possibilities of a middle-class family, SIPs have been a great option in reaping the market benefits.

But there definitely is a hitch when it comes to investing in SIPs. ‘Mutual Funds Sahi Hai’ is a household dialogue now, though the lesser-known fact is there there is a sea of schemes and selecting the right one based on your risk appetite and goal. So, what do you do next?

The next thing that needs to be done is ‘evaluation’. One has to evaluate the best possible scheme by analysing all options and going forward with the SIP that best suits their needs. Here are the steps involved in the evaluation process.

Defining your Investment Goal

The first and foremost of all that comes into play when selecting your ideal Mutual Fund SIP is the ‘Goal’. What do you want to achieve using the money that you are about to invest?

I’m ...
... investing a lump sum to save on Taxes (Yes this can be done)
I’m saving money for my child’s higher education.
I’m saving money monthly for my retirement.
I’m saving money for my daughter’ marriage.
I’m saving money for a short term to go on my dream vacation.

So what’s your reason?

Shortlist your Favourite Funds

This step is crucial and often requires external help. Either a screener tool or a chat with certified advisors who give their unbiased opinion will be of great help.

Has history been kind?

Often the funds that you are willing to invest in wouldn’t be what you expect it to be. So how do you know how it would fare in the near future. Here’s where history comes into play. Cross-check the fund performance with other Mutual Funds. How has your fund fared when the times have been difficult economically. Additionally, cross-check the performance with index funds to know the performance during the industry ups and downs.

Risk Appetite

Ups and downs are often involved with investments in mutual funds but what about your appetite when these occur. Investing in the right SIP post referring ratings like CRISIL is considered best. For people with a higher risk appetite, choosing appropriate schemes referring to these ratings would be a wise option.