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How To Get The Most Out Of Your Mutual Fund And Where To Start In 2022

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Mutual fund

What is mutual funds ??

A mutual fund is a collective investments that pulls together the money of a large number of investors to purchase a variety of securities like stocks, bonds debentures and all the likes of it,

Or you can say, a mutual fund is a professionally managed fund for a pool of investors who want to invest in diverse investment options like the money market, stocks, shares, bonds etc

In a clearer Understanding , Mutual funds collect money from people like us ,

for example a mutual funds collects 10,000 from Mr A and 10,000 from Mr B pools the money together then the fund manager then uses the pool to invest in stock, shares, bonds etc.

you don’t have to worry about your money because the fund manager secures your money for a commission of 100% if you want to invest in long-term investment mutual fund is an ideal investment because your money will go and earn for you while you ain’t even thinking about it,

but you should also be careful in choosing a fund manager because if you chooses a bad fund manager he/ she might invest in bad stocks and end up losing your money,

that is why you need to ask questions about on what the mutual funds organization is using your money to invest in however in this article I will show you what to do so that you don’t end up losing your money.

mutual funds benefit

1: away to make a diversified investment

2: manage by a professional

3: allows investors to participate in wide variety of investments

5 Fund Types Every Investor Should Know About

>equity or stock funds:

this type of funds invest in shares, stocks of companies, although they are considered high risk but they also bring in good results

Debt funds:

Investors from this mutual fund invest in debt instruments like debentures, government shares but you should know that the return is less although the risk is also low

high yield or balanced mutual funds:

As the name implies they may either choose to invest in both equity and debt funds that is 50/50 or 70/30 , or the money money market and equity funds , either ways.

The aim is to give the investors a moderate return on a moderate risk.

However, you should know that the higher the risk you take in mutual fund the higher the return and the higher the chances of loosing,

and also the type of security that you invest in will determine the type of risk you are asking for and that you can take.

Money market

Ethical mutual funds –

This deals in securities that suits some particular type of people like alcohol companies, Climate friendly companies etc

Guaranteed Balanced mutual funds

how to pick the best mutual fund

you should know that there are so many mutual funds out there, so be wise to pick the best mutual funds and before you could do this they are some certain things you need to have in mind

1: consider the duration of your mutual fund investment, that is if you want to invest in short-term investments like one or two years then don’t use equity funds choose debt fund because they are less risky then equity fund and they’ll give more than enough in the bank.

2: if you want to invest a long term there are basically two options one
.Lumpson and
.sip

Lumpson is when you have a huge amount in savings, while sip is where you invest as little or as much as you can and every month that money pulls from your savings account to your mutual thereby giving much and consistent Returns.

So sip is the best and most reliable long-term mutual fund investment especially for a beginner with little knowledge.

3: Which mutual funds to pick there are basically two types

1: large gap

2: Mid gap and

3: Small-gap

* Large gap invest in big companies that are already well established so the risk is less

*Mid gap comes with moderate risk and moderate returns

* small gap invest in smaller companies so the risk is very high but the return if succeeded is a mouth-watering returns.

But as a beginner, it is advisable that you go with a large gap scheme

4: Mutual Fund perimeters Before choosing a mutual funds you must check out the parameters such as

* returns; how much the mutual fund has made in the past

* expense rate; how much the fund manager is willing to accept to maintain the account

* Exit and Entry laws

5 ; Index funds in this type of mutual fund you don’t need a fund manager so the expense rate is very low, but this means a higher risk .

how to open a mutual fund account

1: select the type of Mutual Fund

2: figure out a sip account

Can I open a mutual funds account with Nigerian banks

And of course Nigerian banks like Zenith bank and Stanbic IBTC Bank offers a mutual fund account investment with a money safe guarantee,

is it wise to invest with stanbic ibtc

Stanbic ibtc mutual fund gives you 100% Assurance that your money is safe, but hey that doesn’t mean you shouldn’t ask questions were your money is being invested,

your fund manager should enlighten you on every details so you could know the kind of risk you are taking and the returns to expect.

Some of the benefits of investing with Stanbic Ibtc is the joy of getting pension after retirement even though you’re not a government worker,

think of it this way when you invest with Stanbic Ibtc, leaving your capital and cashing out only your returns,

this means Stanbic Ibtc will continually invest with your capital and only dishing out your returns and you in return will continually cash out all through your life,

With this way it will seem as if you insured your life and your happiness is guaranteed.

best time to in a mutual fund!

You don’t have to worry about the best time to invest in a mutual fund if you are Investing with an organization like the bank or other mutual funds companies,

as they will study and determine the best time to invest. However, if you are not sure, or you didn’t trust them to do a better work, perhaps you have chosen to invest in the stock market,

you just have to check the stock market signal and invest when the waves are going down, so that the return will be high when the waves has gone high, however you need to study the signal very carefully

Is There A Wrong Time To Invest In A Mutual Fund?

You are probably asking for the best time of the year to invest in a mutual fund?, well According to research, mutual fund is best invested on the early days/ months of the year that is from February to late August.

But however, this is not a guarantee it is still ideal to study the market, do some checks to avoid risk, because the market like money and stock market may rise and fall at some point.

I am a personal finance coach, who finds joy in helping business owners and just anyone to live a successful financial life.

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