All of us today believe in investing in mutual funds to multiply savings and maximize return. So we have designed an algorithm to help you plan better in order to form a balanced portfolio. But before we introduce you to this algorithm, let us tell you what the bases of this formulation.
We all remember not to keep all eggs in one basket and so most of us keep on buying mutual funds of different sectors in order to diversify. But without realizing that though we have distributed risk sector-wise, but has our fund portfolio really gone strong bringing all the expected mutual fund benefits? We here have tried to advise a 360-degree fund cushion for a stronger tomorrow.
- Wealth Optimizer Mutual Funds
These are the type of portfolios that let you be aggressive with your risks. These essentially have the maximum potential for high returns, but they do not antagonize the associate drisks. The best, time tested approach for investing in these mutual funds is SIP.
Wealth Optimizers are composed of two mid-caps, one small-cap and one large-cap fund for most of the fund houses. Investors with a horizon of 5-7 years with a significant risk appétit are the target demographic here, the ones that are not horrified by minor market crashes and volatility
- Strengthening Finances
These types of mutual funds focus typically on large-cap equities. They fit in perfectly for someone who’s planning to invest in mutual funds for a longer tenure, of about 10 to 12 years. They tend to be on a cautiously aggressive risk profile.
Top mutual funds in India claim more 26% return with these mutual funds, which is a big number for national markets.
- Stable Mutual Funds
For someone who knows the importance of mutual funds, these are the best kind. They bring the best of both worlds (debt market and equity market) to your plate and create a holistic balance between risk and reward. They tend to bestow reasonable financial growth with minimal risk of losses.
- Secure Mutual Funds
The key secured mutual fund benefit is that you work on a risk-tight pattern. They focus lesson investing in equities but in three to four short term debt funds, one debt hybrid fund, andan ELSS scheme. They follow a conservative approach to asset allocation.
- Futuristic Mutual Funds
This is the category of the mutual funds that essentially helps you retire peacefully. Futuristic or golden years’ mutual funds benefit you by letting you withdraw monthly income, so it’s kind of like bank deposits,except the return rates are quite higher. It is unlike any other mutual fund type as here you have to invest a lump sum amount in the beginning. It comprises of medium-term income schemes, short-term debt plans – two each while you have one debt-oriented hybrid plan.
These above listed are must-haves in your portfolio, but they are not the only ones, each one of us have a different horizon and different perspective, gauge and choose cautiously today for a carefree tomorrow.
Raj Kumar is a qualified business/finance writer expert in investment, debt, credit cards, Passive income, financial updates. He advises in his blog finance clap.