Mutual funds are the favorite investment platform for novice investors, they are very practical and simple, and we can start investing with just $1. However, before investing, investors should choose a mutual fund platform that has been registered with the government and is trusted. Apart from that, investors also need to consider several factors as follows:
1. Risk Profile
Before entering the world of mutual fund investment, investors must first know their risk profile, such as Very Conservative, Conservative, moderate and aggressive, then the type of investment that is suitable is as follows:
Very conservative: money markets
Conservative: fixed income
Moderate: mixed mutual funds
Aggressive: stock mutual funds.
2. Adjust to financial goals
Even though you have an aggressive risk profile and can choose mutual fund shares, if your goal is only for the short term of less than 5 years then stock profits (capital gains) will not be optimal. So it is necessary to adjust the risk profile and investment duration.
3. Check the Draw Down Value
The draw down value is the maximum loss level for each mutual fund product. The lower it is, the better it is.
1. Risk Profile
Before entering the world of mutual fund investment, investors must first know their risk profile, such as Very Conservative, Conservative, moderate and aggressive, then the type of investment that is suitable is as follows:
Very conservative: money markets
Conservative: fixed income
Moderate: mixed mutual funds
Aggressive: stock mutual funds.
2. Adjust to financial goals
Even though you have an aggressive risk profile and can choose mutual fund shares, if your goal is only for the short term of less than 5 years then stock profits (capital gains) will not be optimal. So it is necessary to adjust the risk profile and investment duration.
3. Check the Draw Down Value
The draw down value is the maximum loss level for each mutual fund product. The lower it is, the better it is.
