Diversified mutual funds are a suitable choice for investors to evaluate their savings. Here are a few things to watch out for.
The mutual funds market, an important address for investments and small savings with little money, continues to grow.
In recent years, thanks to the opportunities provided by the legal infrastructure, mutual funds have become available to all types of investor profiles. Today, the most preferred alternatives are money market funds consisting of liquid, short-term bonds and bills funds, fixed-income funds investing mainly in the bond market and A-type funds investing in stock markets.
It is possible to easily invest in the stocks of the biggest technology companies of the world and benefit from the opportunities of return through the funds that provide the opportunity to easily invest in foreign markets.
Capital guaranteed and protected funds are important alternatives for investors who say that there is no risk, my capital should be protected but my money should continue to work.
For example, thanks to the diversity in the market, there is a fund that fits the risk profile and expectations of every investor. The ease of TEFAS, which allows you to trade all the funds in the market with a single investment account, should also be noted here.
Mutual funds are indeed a good alternative for investors to assess their savings or diversify their portfolios.
Take a look at some brief information that will benefit you in fund investments:
Predict your risk preference, expectations and optimal strategy
Risk preference in investment is a decision that you make considering the possible negative consequences of your investment and being aware of the possibility of loss. In terms of mutual funds, if you do not target capital protected and guaranteed return funds, you should determine your risk preference in advance.
The ideal is to diversify the portfolio with a strategy that includes different funds in line with the risk preference of the investor. Thanks to portfolio diversification, risk is reduced by reducing and thus making the best use of potential returns.
Long-term approach to mutual funds
Although it varies by type, the short-term in mutual funds is often not the right approach. You need to treat mutual funds other than liquid funds with a partially longer term approach such as 6 months or more.
If you have time and cash problems, it would be more logical to determine your maturity preference before the return. For this reason, you can make a choice by taking into account your personal financial situation such as time and cash.
Focus on your expectations and goals
An investment fund may not consistently perform the same. In this respect, although past period returns of mutual funds can be considered as reference, it is not always the right approach to focus only on previous period returns. Because, depending on the developments in the markets and changing or likely to change, mutual funds will be affected positively or negatively.
Therefore, refer to the past returns of the funds as reference, but do not allow the available values to exceed your expectations. Because the situation can always change.
Do not blindly link your maturity plan
The biggest problem of yatırım falling in love ına to certain mutual funds makes it difficult to dispose of them when the time comes. Although this problem affects many fund investors less, even qualified investors who sometimes have well-managed portfolios may suffer from it.
In order not to fall into this situation, the most ideal thing to do is to review your predetermined maturity, expectation and target regarding the management of your portfolio. Because if a fund has begun to drastically reduce the value of your portfolio, it may be time to take control of the situation.
Diversify and concentrate
It is correct to diversify among mutual funds, reduce risk, increase potential returns, and not concentrate on just a few funds, but you should address this from a wider perspective. Because no investment product alone meets your needs. For example, an investment fund is not an alternative to a deposit or any other investment product.
Therefore, you should diversify your portfolio with other investment products that are alternatives to mutual funds to take advantage of potential returns and reduce risk.