Steps for investing in Mutual Funds Safely

In life, we have something called as “Risk-Reward Ratio”.

1) Higher Risk, Higher Reward

2) Lower Risk, Lower Reward

Risk-Reward Ration in Investing (Link)

Now coming to the point of investing safely.

Anything linked to Stock Market carries an inherent risk of loss of capital and/or subpar returns. Despite this, Equities are the best vehicle to beat inflation and create wealth.

So, as a retail investor, the following steps can allow to safeguard capital and create wealth

  1. Invest in Index Fund like Nifty 50, BSE Sensex, etc. (Lowest Risk)
  2. Invest in Balanced Mutual Fund with Equity-Debt balancing from 30% to 70% (Low Risk)
  3. Invest in Large Cap Mutual Fund (Moderate Risk)
  4. Invest in MultiCap Mutual Fund (Moderate Risk)
  5. Invest in MidCap Mutual Fund followed by Small Cap Fund (High Risk)

Benefits of Mutual Funds (Link)

Sharing some pages that can aid in skimming through the five step investment in Mutual Funds

Hope this helps

You can follow my blog or Facebook page on investing for getting insight into other stocks.

Happy Investing!!

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