Finance / Financial Planning

Dear Dollar Didi, how do I start investing in mutual funds?

. 2 min read . Written by Vanshika Goenka
Dear Dollar Didi, how do I start investing in mutual funds?

Dollar Didi is Kool Kanya’s financial advice column.

Q. Dear Dollar Didi, I want to invest in mutual funds, but I’m afraid to do it. Could you please guide me in getting started on investing in mutual funds?

Hi Darling,

To start with, thank you so much for raising the question. Women don’t invest in mutual funds on their own. In our grandmother’s era, it was unthinkable for a woman to claim her money, let alone make an invest of it. This hasn’t changed much even today. We have started taking ownership of our earnings, but rarely do we think of investing.

Mutual fund investments are an excellent way of reaching your financial goals faster than the time-tested Recurring Deposit and Fixed Deposit methods. It makes your money work for you.

Here’s how you can begin the rewarding journey via mutual funds.

Identify your financial goal

Start by recognising your financial goals. Ask these questions to yourself and set realistic objectives:

  • Why do you want to invest in mutual funds?
  • What is your time horizon?
  • How much money do you intend to invest?
  • How much return you intend to generate?

You can begin with a large-cap fund that invests a more substantial proportion of the corpus in old and well-established companies that are trustworthy and reputable.

Find your financial pointers

Identify the value of your fund, its net asset value, return percentage, expense ratio, entry load, exit load, alpha, beta, etc. They sound a bit too technical, but they are not tough to understand once you begin deep diving. Just start studying these pointers. A basic search on the internet helps. Consider joining social media groups that address these issues.

Know your fund manager

Learn about your fund manager and their strategies. This is a crucial step as they are the brains behind the funding strategy you will be investing in. Look for their experiences and performance to choose the best one for you.

Look for an investors community

Search for an investors’ community around you and explore the resources they have to offer. It’s a mistake to study investments and do them alone. Join the community of investors so that you can discuss concerns and share each other’s experiences. We all have seen successful investors discussing their investment ideas with others around them.

Are you looking for one such community of women investors? Head over to Women on Wealth.

Although, be aware that you will be on a learning curve. On an adventure that requires willingness and patience for results to show up. Investing in financial instruments without any dependency is a skill that you will be learning over time.

This post is written in collaboration with Priyanka Bhatia from Women on Wealth. Since 2008, Priyanka has worked passionately on creating platforms and programs for wealth creation for women. Women on Wealth was created in 2012 to provide skills to women who experienced financial anxiety or suffocation and lacked the skills to take them towards financial freedom.