Muddles To Evade While Investing In Mutual Funds

Wrong investment decisions can have a cost during volatile periods.

- Suyash Desai

Mutual Funds are slowly heading towards being one of the most loved asset classes in India. Be it the increasing investor awareness drives, the demographic advantage with increased purchasing power or both, investment in mutual fund industry is increasing every month. Just before the economic reforms, the industry’s (UTI) Asset under Management (AUM) was a modest 6700 crore. And, at the end of October 2018, the total AUM of the industry stood at 23.59 lakh crore. It is to be noted that around 11 per cent of registered PAN account holders and only two per cent of the total Indian population is investing in this asset class. So, the potential growth for this industry is still huge.

However, as the calendar year 2018 has shown, market investments are subject to risk, and wrong investment decisions can have a cost during volatile periods. Acknowledging the fact that volatility is here to stay for at least the next half year till the Lok Sabha elections, we look at the most common mistakes that a person commits while investing in this asset class and how to overcome it.