The first and most important thing about becoming a better investor is to know and learn about investing thoroughly. Read and understand about investing, why are you interested in investing, know your goals, your risk appetite, etc.
For instance, Just the way when you purchase any new mobile or any electronic device you learn and understand it thoroughly and compare it with another device. Likewise, selecting any mutual fund or any fund without any knowledge, of what someone tells you won’t work. One needs to gain lots of knowledge about investing to become a better investor.
Here are some important points to keep in mind to become a better investor using MFs –
Identify your purpose for investing
This is the very first step towards investing in a mutual fund. You need to be clear with your investment goals. If you don’t have any specific goal, you should at least have clarity on how much wealth you want to accumulate. Identifying your investment goal helps in investing based on the level of risk, lock-in period, returns, etc.
Know your customer requirements (KYC)
To invest in a mutual fund, investors need to comply with the KYC guidelines. For this, the investor needs to submit copies of their PAN card, proof of residence, etc as specified by the fund houses.
Know about schemes available
Make sure that you have understood the different types of schemes available. Align your risk appetite and investment goals with the selected schemes. Seek the help of an investment advisor if you aren’t sure.
Therefore, these are some key factors that might help in becoming a better investor using mutual funds.