Nobody would say no to good returns. High returns is the goal of every investor who goes to the market to make money. But like they say, fortune has its own ways and sometimes we are dealt bad hands. Is there a way to ensure good returns? If you invest smartly, good returns will follow. This article will tell you how.
There are different avenues of investment in India. Some methods of investment are new, like stock market and mutual funds, as well as modes of investment that are more traditional. The conventional ways of investment includes investing in assets like real estate, gold, bank deposits and so on.
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Tuesday 12 Nov. 2024
Let’s assume that you prefer investing in mutual funds. As you may know, there are different types of mutual funds India. These different types of mutual funds that cater to the risk appetite and investment goals of different types of investors. That being the case, a little research will tell you which are the high return mutual funds. Once you find the mutual fund which is most suitable for you, go ahead and invest.
Types of Mutual Funds
Mutual funds are of many sorts. According to Securities and Exchange Board of India (SEBI), there are five different categories of mutual funds, with several subcategories of each. There is a type of mutual fund that is ideal for each investor. How do you find which one is yours? Your mutual fund investment depends on what kind of investor you are.
There are a few parameters you could look at to understand what kind of investor you are. Make sure that the mutual fund you choose fits well with your investment goals, your risk tolerance and time horizon. Do not simply chase high return mutual funds. Keep in mind that high returns comes with higher risk too.
Risk
Low risk high return mutual funds are rare to come across. If you think you have found one, do not think twice before investing. The combination of low risk and high returns is the dream of most investors. It offers you the ease of high returns coupled with the peace of less risk.
It is equally important that you invest according to your risk profile. A mistake that investors often make is to come under the influence of others and invest money blindly in mutual funds or stocks that they do not know enough about. Investment is an activity that requires research. How you invest impacts highly the returns you earn.
SIP
If you are already an investor, you might know how volatile the market is. It has cycles of rise and fall. For an investor, this is a matter of concern. This is the reason why most investors worry about timing their investments according to the ups and downs in the market.
However, there is a limitation to this. One can only follow their intuition and predict how the market may go. It may go entirely the other way and we might end up losing money. Is there a way to ensure that you do not get caught up in this cycle? For investors who want an easy way out of these worries, there is a tool known as Systematic Investment Plan (SIP).
A SIP allows you to invest small amounts of money periodically. Hence there is no need to worry about timing your investments. SIP ensures that you capture the high and the low alike, which is eventually balanced out. To know what your high return SIP amount is, go to a SIP Calculator.
Where to Invest to Get Good Returns?
Equity mutual funds are mutual funds that invest in equities or stocks of companies. It is further divided into several categories such as large cap, mid cap, small cap, multi cap and so on. This categorisation is on the basis of asset class. Remember that large cap companies have less amount of risk associated than small cap companies and vice versa. Return is directly proportional to risk, which means higher the risk, the better the returns.
Debt schemes are the mutual funds that invest in securities and bonds issued by government and other corporations. This is a low risk scheme with less returns than equities. If you prefer lower risk and stable income, then debt funds are ideal for you. As the name suggests, hybrid schemes invest in both equities and bonds. Therefore they offer the best of both worlds in terms of risk and returns.
Mutual fund investment should always be an individual process. Carefully consider your long term goals and needs before you dive in.
Top Picks
| Mutual Fund | NAV (in rupees) | Returns -1Y | 3Y | 5Y |
| Axis Bluechip Fund – Direct Growth | 33.25 | 19.4% | 15.4% | 13.0% |
| Mirae Asset Emerging Bluechip Fund Direct Growth | 55.70 | 11.4% | 11.8% | 17.0% |
| Axis Midcap DIrect Growth | 40.56 | 12.2% | 12.1% | 12.6% |
| SBI Small Cap Fund Direct Growth | 55.40 | 4.7% | 12.0% | 18.0% |
| Kotak Standard Multicap Fund Direct Growth | 37.42 | 9.3% | 10.4% | 13.3% |
Disclaimer : This is just a list of well performing funds based on past performance and not a recommendation. Please invest according to your risk profile and investment objective.
