Top 10 Rules Before Investing in Mutual Funds | Guidelines

While there was time only western countries were developing through fund markets and share markets – here the time has come for India and China giving the golden opportunity to their citizens opening up the market for investments and related profit making platforms. Mutual funds are one of the best investment tools to make a high yielding income if it is handled with proper knowledge of the markets. Here are the top 10 mutual funds guidelines to be followed before investing in mutual funds. These tips can keep you in the safer track while investing in mutual funds.

10 Rules for Mutual Fund Investments

Mutual Funds Guidelines & Basics

Follow these rules as mutual funds guidelines before deciding to invest into mutual fund. It is always safe to know the nook and corners of it before stepping in.

  • 1. Don’t keep your investments in more than 5 mutual fund companies.
  • 2. In India there are approximately more than 35 mutual fund companies exists. As per December 2008 statement, the biggest company manages 70,000 crore rupees and the smallest company manages 37 crore rupees. See that the company you are investing is within the place of top 15 companies. Now the company which is in the 15th place manages an amount of approximately 7,000 crore rupees.
  • 3. See that the company you are choosing manages all types of schemes (share market based, liquid, credit based schemes etc). Only then it will be easy to change from one plan to another plan.
  • 4. If you are opting to invest through SIP, make sure to have not more than give SIPs.
  • 5. The schemes you are choosing should be in existence at least for about 5 to 10 years. Those schemes should be managing a minimum amount of rupees 500 crores and a maximum of 2,500 crore rupees – this will be a good sign.
  • 6. New investors when going into share based funds it is good to choose only best diversified schemes for your investments which are in the market for a long time.
  • 7. In every mutual fund company, see to it that all the investments come under one folio.
  • 8. To your investment adviser, ask him or her why they recommend a particular scheme for investment. Further, make sure whether they’ll still serve or assist you after selling the mutual funds.
  • 9. This is the right time to streamline your investments. Get off the unwanted aspects and increase your profit giving investments keeping your portfolio proper and beneficial.
  • 10. Now the facility is available to make KYC (Know Your Customer) for all your mutual funds at once. If there is any change in the address or your point of communication, it is enough to change them all to one place. This is better if all do this.
  • Have a checklist of all these important mutual funds guidelines to keep your investments streamlined stepping towards a profitable zone of financial success. Both for the new investors and those who are already in the market – the revision of the above points might correct you if you’ve not done any of the above. Though mutual fund investments are subject to market risks, it is all the responsibility of the investors to follow the ethics keeping their records clear and worry-free. Take care of your money and your investments.