Which Mutual Fund Is Best in 2022 | Full Guide How to choose a mutual fund

Which Mutual Fund Is Best

If you invest in any mutual fund, then it remains in your mind that fund should grow as much as possible and provide you the best returns and to achieve this goal, you people start Google Searching on, searching on YouTube, and taking recommendations from people about which mutual fund is the best.

For most of you, the best mutual fund would mean the fund giving maximum returns. But if you run only after returns, you may not get back the money you invested.

How to identify the right mutual fund keeping in mind the investment objective you have and whether there are points that you need to look for in a mutual fund before selecting a mutual fund.

No mutual fund is best. The mutual fund which is best for you is not necessarily the best for all investors. That’s why in order to find the right mutual fund, you should first know your investment objective, what you are investing for.

Best mutual fund :

Which Mutual Fund Is Best
Which Mutual Fund Is Best

It is just a fictional word. In reality, there is no such fund. If a fund is performing well today then it is not necessary that it will perform well in the coming time and if a fund is Not doing well today, then maybe that fund will perform well in the coming time and you will get to see good returns.

Many retailers lose money because they think that we have invested money in the best mutual fund, but they do not even know how long that best mutual fund has been the best. Which Mutual Fund Is Best

What do a lot of people in general? Picking a list of 8 to 10 mutual funds, they see the returns of their last three years and they invest their money in whichever fund they see the highest returns. This is not the right way to invest.

Right WAY :

What is the right way to invest in mutual funds? To identify the right mutual fund , you first need to ask yourself three questions. What is your investment objective first? Why do you want to invest? Second, for how much time do you want to invest and thirdly, how much risk can you take.

If you can answer these three questions, then you can identify the best mutual fund for yourself. Which Mutual Fund Is Best

Investment objective :

Before investing in mutual funds, first you need to know why you are investing. Every investor has a different goal. Somebody has to invest for building a house, someone has to invest for getting a car, some one has to invest for education and someone has to invest for foreign vacation.

While one has to invest for retirement and someone has to invest for tax saving. Everyone has a different goal, so first of all you have to know your goal, why do you want to invest.

Now as someone’s goal is to build a house, retire or education, then he should take less risk. He should invest in low risk funds. Now someone has a plan to go on a foreign vacation after 3 to 4 years, so you can invest for that too.

Whatever you will invest for that, you can also invest in high risk securities, so that if you see good returns in it, then the budget for your foreign vacation can also increase.

But even if you do not get to see good returns in it, you can still go on your foreign vacation trip. Which Mutual Fund Is Best

But if you lose in that, then you can also sacrifice your foreign vacation trip, but education retirement cannot sacrifice these things.

Which Mutual Fund Is Best

How much time you have to invest :

If you have to invest only for 1 to 3 years then you should invest in debt category mutual funds only because there the risk is less and you will get to see normal decent returns

if your plan is for 3 to 5 years. If you want to invest, you can also invest in hybrid category funds. Where you will get to see good returns from the date category.

And if your investment plan is more than seven years or if your investment plan is more than five years then you should invest in equity. To invest in equities, your investment plan should be at least five years. Which Mutual Fund Is Best

If you invest in equity mutual funds for less than five years, it can be very risky as the money invested in equity tends to go a long way in the long run.

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Risk :

Which Mutual Fund Is Best

There are three factors to decide how much risk you can take.

Now you have decided the category according to the time period, in which category of mutual fund you want to invest, and pick a mutual fund of that category.

Let’s see his history now. How is his past performance, if his return for the first year is 25% and his return for the second year is 15 to 20 percent then it is also fine.

But if its second-year returns are negative, then you have to avoid investing in such funds. If the return of the second stock is -5 percent in the first year, about 25 percent For the second year, then you will get 20 percent for the two years.

But that 20% which is there is aggregate, you do not have to invest in funds with negative returns.

Before investing in any fund, you also need to check its consistency. Consistent funds always perform well in the long term. Which Mutual Fund Is Best

for example You have two funds. Fund One and Fund two, these are the same category of funds. Fund One is giving you returns of 10% in the first year, 9% in the second year, 9.5% in the third year, if it is giving consistent returns, then you have to invest in such funds.

Which Mutual Fund Is Best

Now let’s talk about Fund 2

Its first year’s return is 20%, second year’s return is 5%, third year’s return is 9%, so you have to avoid investing in such funds.

You should invest in a consistent fund because in a consistent fund you can predict that you will see the same return in the coming 3 to 4 years, but in this type of fund you are not sure how much you will get If you can get 2% return in some year, then you can also get 20% return in some year, if you invest in this type of fund, then you will be assured that you will definitely see 9 to 10 percent return.

Performance :

Now how your fund will perform depends on the experience of your fund manager, on his active involvement as he is the person who decides your fund, which stocks, which securities to invest money in and How to invest If the fund manager has a good track record. Which Mutual Fund Is Best

If he has good experience then there is a very high chance that your mutual fund will perform well.

If the fund manager is not actively efficient then there are high chances that the fund may not perform well and you may not see good returns.

It would be a matter of which mutual fund you have to choose?

Definition Of mutual fund

A mutual fund is a professionally-managed investment scheme, usually run by an asset management company that brings together a group of people

Mutual fund vs index fund

Index Funds Are More Passive. While Mutual funds are actively managed by an investment professional.

Mutual fund vs etf

Mutual Funds have more tax liabilities than ETFs.

why mutual fund market is down

Most of the equity mutual fund categories offered negative returns in one day due to the fall in the market.

can mutual fund make you rich

its depend in which way you choose mutual fund and for long time you have to invest in it

How mutual fund is calculated

by dividing the total net assets by the total number of units issued. To get the total net assets of a fund, subtract any liabilities from the current value of the mutual fund’s assets and then divide the figure by the total number of units outstanding.

Are mutual fund taxable

Dividends paid by equity mutual funds are tax-free in the hands of the investor but the AMC pays dividend distribution tax at the rate of 11.648%. 

Is a mutual fund safe ??

yes mutual fund is safe, You should choose the right mutual fund,

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