You conduct research, select a mutual fund plan that meets your aims, budget, perform all kinds of analysis, and then invest in a mutual fund scheme. Then, when the investment period comes to a close, you can reap the rewards of capital growth. It is as simple as that, right? Not always. Investing in a mutual fund entails more than just putting money into it and waiting for it to pay off at the end of the investment term. To truly enjoy its full benefits, more effort is required from your end to constantly monitor and analyse various parameters of your portfolio. To achieve optimal capital growth, you must keep a careful eye on it and manage it well during the investing period. Sometimes, switching between funds is necessary to avoid market risks, avoid fund underperformance, and avoid fund performance stagnation. Signs that you need to change your mutual find scheme Change in investment goals Before you begin investing in mutual funds, you must first devise a strategy that is tailored to your specific objectives, risk appetite, investment horizon, budget, and other objectives. The type of mutual fund schemes you should invest in is determined by these criteria. Mutual fund investments can be divided into three categories based on their investment horizon: short, long, and intermediate. Risk appetites are divided into three categories: aggressive, moderate, and conservative. It is important to keep your expectations in check in terms of the kind of profits do you hope to get from your mutual fund investment. In this instance, mutual fund schemes might be classified as income-oriented, balanced, or growth-oriented. When investing in a mutual fund scheme, you may have had a certain goal in mind. But what happens if your goal shifts in the middle of the project? You can switch between funds in this situation to suit your new investing goal, horizon, and risk tolerance. On a side note, one of the first things to keep in mind when it comes to investing in mutual funds is to identify the top brokers in share market . Zebu is a leading online share broker that offers one of the lowest brokerage fees when it comes to investing in mutual funds. Read on to know more about when to change your mutual fund plans. Your scheme is underperforming There's no guarantee that the mutual fund scheme in which you invested will perform well over time. You may have analysed prior fund performance and tried every permutation and combination to find the right mutual fund investment for you. Despite your best efforts, you never know when your scheme will underperform or become vulnerable to hazards, even in favourable market conditions. To ensure that your portfolio does not become stagnant, you must switch to a different fund. To keep the portfolio balanced, over-weight mutual funds should be rotated. You simply feel like you made the wrong choice When it comes to even the safest investment options, mistakes are bound to occur (especially if you are doing the research by yourself). Fortunately, investing in mutual funds is not one of them. Worry not if you bought in a mutual fund without doing your homework or understanding key technical features, only to discover later that it isn't a good fit for your goals or risk tolerance. Your current assets can easily be reallocated into a portfolio that matches your needs. In the world of mutual fund investing, erroneous predictions are more common than you would think. Sometimes, even seasoned fund managers can get their analysis proved wrong. For these reasons and more, it is crucial that you keep a close eye on your mutual funds and keep your options open and diverse. Apart from this, to maintain balance and enhance fund performance, an investor should rotate the assets in his or her portfolio on a regular basis. With Zebu’s seamless investment platform, which is one of the top brokers in share market, you can get started with direct mutual funds and make more than 1% of the returns you would otherwise make with managed mutual funds. And with our lowest brokerage fees, you can confidently make changes to your scheme as per your requirements. We are, in fact, one of India’s leading online sharebrokers. To know more, please get in touch with us now.
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