5 mistakes to avoid if you want higher mutual fund returns

financialexpress.com:

Investing in mutual funds is considered a suitable method for accomplishing long-term financial objectives and cultivating wealth efficiently while minimising tax implications. These funds not only offer the potential for returns that surpass inflation but also provide a way to manage risk. The core elements for maximising the benefits of mutual funds are maintaining patience and staying focused on predetermined goals.

Nevertheless, many investors often encounter unfavourable experiences with mutual fund investments. More often than not, these negative outcomes are not due to the poor performance of the funds but rather the result of investors’ irrational behaviours.

Here are five common mutual fund mistakes which you should avoid if you want higher returns from mutual funds:

Avoid investing in mutual funds for short-term gains. It’s essential to have a long-term investment horizon of at least seven years, preferably longer. Market performance, influenced by the underlying securities of mutual fund schemes, follows cycles of outperformance and underperformance. Short-term investments might not yield desired outcomes unless accompanied by exceptional luck. Additionally, investing without specific goals can lead to undisciplined and volatile decision-making during market fluctuations. Having clear goals helps in enduring market cycles, enabling the acquisition of units at lower prices, and eventually fostering substantial long-term wealth.

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Ensuring the proportional alignment of your mutual fund investments with your future financial objectives is crucial. For instance, if you aim to accumulate a corpus of Rs 1 crore in the next 20 years, investing