Kavan Choksi Japan – Factors to Remember Before Investing in Liquid Mutual Funds

People let the money sit in their bank account even when the sum is significantly more than what theyneed in the management of daily expenses. Do not let this surplus cash lie idle in your savings deposit. You should rather invest this money in a liquid mutual fund that will offer you potential returns that are higher than what your bank would give you.

Kavan Choksi Japanspeaks on why liquid funds are convenient

Liquid funds are perfect for investing surplus money for a period of 1-90 days and are actually the least volatile of all the mutual funds available in the market today. According to Kavan Choksi Japan, liquid funds are simple for you to operate as they do not have the entry and the exit loads like the other investment options in the market. Redemption money is easily available to you on the following business day if you wish to sell your holdings in the fund.

Balanced mutual funds for medium-term financialgoals

A balanced or hybrid mutual fund is perfect for medium-term investments, say for the following 3-5 years. Balanced fundsare a type of hybrid mutual fund where you invest in mixed equity along with debt securities. They have thetraits of both equity and debt funds while giving you a moderate risk-return in the future. They are ideal for investors who want to play it safe.

Invest in equity for the long-term

When your financial goal is a long time away, for instance, your retirement life that wouldstart in the next 15 years or your son’s higher education will become due in the next seven years, you should go in for a well-diversified equity fund.

Equity funds are ideal for long-term investments of more than five years since equities are prone to face a growth in value in the short run but render good returns in the long run. Invest prudently in some equity funds suitable to your portfolio. This indicates your willingness to take risks. Consider investing smartly and do it directly with equities; however, mutual funds are ideal for those who do not like to take risks with stocks.

Be flexible, regularly monitor and rebalance your investment portfolio frequently

After you have invested money in diversified mutual funds, PPFs, stocks, and more, you should monitoryour portfolio frequently and make changes as and when required. Note thatrebalancing is needed for any changes in your life events or circumstances. For example, you switch your job from an MNC to a start-up where your financial risks are higher. Under such a scenario, your portfolio of equities should be lessenedas your human capital is invested in equity that is high-risk in nature.

According to Kavan Choksi Japan, seek professional advice from skilled investment advisors or seek the help of professionalmutual fund distributors for help with the paperwork and the other requirements of the above transactions. The investment advisor will do risk profiling, who will execute a suitability analysis before an investment plan is recommended for you. Understand the risks well before you accept the offer.


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