Making a mistake while investing happens across all investments, and Mutual Funds are no different.
Some of the common mistakes while investing in Mutual Funds are:
📌 Investing without understanding the product
For example, equity funds are meant for the long term, but investors look for easy returns in the short term.
📌 Investing without knowing the risk factors
All Mutual Fund schemes have certain risk factors. Investors need to understand them before making an investment.
📌 Not investing the right amount
Sometimes people invest randomly, often without a goal or plan. In such cases, the amount invested may not yield the desired result.
📌 Redeeming too early
Investors sometimes lose patience or do not give the requisite time for an investment to provide the desired rate of return, and hence redeem prematurely.
📌 Joining the herd
Very often, investors do not exercise individual judgement and get carried away by the buzz in the ‘market’ or ‘media’, and thus make the wrong choice.
📌 Investing without a plan
This is perhaps the biggest mistake. Every single rupee invested needs to have a plan or goal.