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What Should be Investment Strategy for Mutual Fund for 2024?

Long-Term Capital Gain might seem to be changed in investment strategy for the current year anyway mutual funds remain the topmost investment option if you wish to create wealth.

One of the best ways to invest in mutual funds is SIPs, which let you not sell a large number of funds in one go.

Over the years mutual funds have been a good investment option in India. Nonetheless, in recent times people were selling mutual funds at large volumes because of the tax on LTCG announced by the govt in the 2018 budget. The main purpose was to sell the mutual funds at large volumes to make the most of the returns before they would become taxable.

However, we have seen a bounce in the market with the start of the new financial year and it might take some time to recover. The fact is that mutual funds should not be underestimated because mutual funds still remain the top best investment options even after tax on LTCG.

The equity-linked saving scheme funds investments to qualify for tax exemption under section 80C of income tax. It is obvious you wish to adjust your investment portfolio and here you will find a few important factors to plan your mutual fund’s investment in the current year.

Do not Stop SIPs Investment

Systematic investment plans are known as an evergreen technique to invest in mutual funds, the main reason behind it does that need you to sell all the funds in one go. Often more SIPs help you to maintain the savings habit as you have to keep a fixed amount of the investment every month.

But always remember one thing you should not allocate such an amount that is difficult to pay can put your financial life at risk and you might have to leave your investment halfway.

It is good to start investing because SIPs can be started for as low as ₹500 per month. The amount can be increased at a later stage if you wish to invest more amount at some time. The individual who all investing in the market should remain invested and increase the amount over time.

You May Like to Read: How to Invest in Equity Funds?

Escape Long-Term Debt Funds

In long-term debt funds, investors should stay out of these mutual funds. The interest rate on these funds was less in the last three years but the interest rate seems to gain in the current and coming years.

However, these types of mutual funds could have a bad time. Suppose you wish to take mutual funds in the place of investment like fixed deposit, you can look at liquid funds or short-term investment funds where the risks of interest rate are much lower.

Select the Funds with Good Records

It could be tough to choose the right kind of mutual funds investment mainly for new investors. Individuals who are all investing in the market for a long ago know the importance of checking the background of that investment funds because choosing the wrong funds can put your investment goal at risk.

Investors should not go through the fund’s recent returns, they should check everything about the fund before investing in it, like the fund manager’s track record and the expense ratio, etc.

Check the track for funds as long as you want to invest in the funds. Suppose equity funds show 20% of returns in the last year make sure you check the track record of the given funds at least for 3 to 5 years which will give you a broad picture.

Save Tax While Making Wealth

It seems mutual funds are good for making wealth but with the help of equity-linked saving scheme funds, you can save on tax also. According to section 80C of the income tax act, you are allowed to invest up to ₹1.5 Lakhs in ELSS investments.

Tax on LTCG may put you in a situation where you can think it is not good but a 10% tax on LTCG more than ₹1 lakh is less compared to other investment options like fixed deposit etc. One more benefit is that you have to pay tax only if you gain more than ₹1 Lakh which might not possible each year.

You May Like to Read: Investments and Tax on LTCG All You Need to Know

Do not Panic While Selling your Funds

Long-Term Capital Gain mainly depends on what you sell and what’s your gain. So, it is basically balancing your sales. Individuals should not be confused while selling their funds. You can sell funds once you have achieved your investment goal.

It is more important you should not panic about the temporary market situation. Let the bad situation pass out and you should stay invested in it. Once the market starts obtaining, you will be back on your investment goals.

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2 COMMENTS

  1. That is a great tip particularly to those new to the blogosphere.
    Simple but very accurate info? Thank you for sharing this one.

    A must read post!

  2. The issue that you raised in your blog is really very serious, and most of people lose the quality and integrity of such subjects, when they try to pen it down. But, your job is well done.The insights and the opinions shared in this blog are appreciable.
    Thanks

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