Everyone has some goal to achieve. You can make them a reality today. Making suitable investments is an excellent way to work towards your goals. They keep your money working and help you potentially build wealth. Today, there are innumerable financial instruments you can invest in. Mutual Funds are the most popular.
You can invest in Mutual Funds such as Lumpsum Investments or Systematic Investment Plans. In the former, you make a significant one-time investment. In SIPs, you invest a fixed amount frequently. Both modes earn you decent returns and offer maximum investment flexibility. If you want to decide your investment returns, the Lumpsum SIP calculator is a fantastic online tool.
Several investors find themselves in a fix when deciding to stay invested in a Mutual Fund or redeem it. If you find yourself in a similar confusion, consider the following:
Performance
Your fund’s performance should be your primary consideration. Review them from time to time. The easiest way to gauge your fund’s performance is by drawing comparisons. MF return calculator is an online tool that is useful here. Typically, your Mutual Funds should perform better than most other schemes. If your fund performs well, you can consider staying invested or redeeming your investment.
You may choose to stay invested, hoping you will get better returns. But you can redeem and enjoy the returns you have reaped until now.
Applicable NAV
Net Asset Value is the total market value of all securities in your investment portfolio. It indicates your fund’s performance. Note that a fund’s NAV keeps changing, this is because it is calculated every day. NAV have a say on your investment returns. Hence, you should consider the applicable NAV when deciding to hold on to or redeem your investment.
Exit load
Exit load is the fee fund houses charge when you redeem your investment before the completion of the agreed-upon period. This discourages you from redeeming your investment early on and earning substantial returns. Note that not all Mutual Funds have an exit load. However, if your fund does have one, you should consider it before making any decision.
Tax implications
Tax is another important consideration. The tax implications depend on the Mutual Funds scheme and the investment holding period. Use the MF calculator and get an estimate of the returns you will receive. Then consider the tax implications associated with it. Typically, you should strive for tax efficiency. This lets you enjoy most of your returns without high taxation eating into it.
