There are only two rules for selecting the right mutual fund and one rule after investing, as follows:
Rules for selecting the right mutual fund are:
- The fund shall be sponsored by a large and well established organisation that one can reasonably be sure of to be existing for the next hundred years without becoming bankrupt.
- The total fund management charges should be as small as possible.
After you have invested your money, the only rule you MUST follow is just the leave the investment undisturbed for the next thirty to fifty years. You may make further investments but should never sell.
If you cant think of such long term horizon please do not call it investment; call it justsavings. Further, for the purpose of savings, mutual fund is not the right instrument. A fixed deposit with the bank is the right option.
Any mutual fund investment can give stellar results only after a very, very long period. Why so? Please read the important