Did you know that every year you are losing money? Yeah, that is right. With the rate of inflation rising every month and the interest return on keeping the money in the savings account unable to match this, you are actively losing it rather than gaining money or even saving it. 

So whether you are saving money for your wedding or your child’s higher education, just holding your money is not enough. This has made it necessary to opt for alternative ways to invest and multiply your savings. 

While some people prefer putting a larger amount in fixed deposits and periodic income into a recurring deposit, other methods, such as mutual funds, can be utilised to do so in a more rewarding manner. 

This article will explore mutual funds, why someone should invest in them, how to identify hidden gems, and how to calculate your returns using a mutual fund calculator before investing in a particular asset. 

What are mutual funds?

Mutual funds are a specialised form of investment, giving individuals and smaller investors access to professionally managed portfolios. They pool money from several investors to buy various stocks, bonds, or other securities. 

Mutual funds are divided into several categories depending on the type of securities, investment objectives, and types of returns. Investing in mutual funds is subject to market risks; however, diversification allows investors to reduce risk for their investments, making investing relatively safer.

Why should someone invest in mutual funds?

Mutual funds are an easy and relatively safer way to invest your money. Making them an excellent way for individuals to start investing and seeing their money grow. This makes mutual funds one of the preferred investment methods for many people, and is why you should consider investing in one, too. 

How to identify hidden gems and best-performing mutual funds?

Choosing the right mutual funds is critical when investing your money. Although they are a relatively safe option, mutual funds are subject to market risks, and identifying the best performing mutual funds can help prevent significant losses.  

Here are the factors you need to consider to identify best-performing funds and hidden gems which can be utilised to grow your money. 

• Historical performance analysis– One of the best ways of assessing a fund’s performance and consistency is by checking the historical data and seeing where certain funds are slumping or if there is a continuous incline. This can also be used to buy low and sell high in certain circumstances. 

• Fund manager expertise– A fund manager’s expertise is crucial in determining whether or not the fund is reliable. This should also help find hidden gems that are otherwise not discussed in the mainstream. 

• Risk evaluation– One of the first steps in choosing a particular fund is assessing the risk involved with investing in a fund. Large-cap funds are typically safer, but with lower projected returns, mid-cap, and small-cap funds are not as reliable as large-cap ones but can have a greater chance of a windfall. 

• Expert Opinions- Certain qualified experts go into depth when discussing these. Although you might not invest in those discussed funds, they may help you understand the criteria and make the right choice. 

How to calculate returns using a mutual fund calculator?

Understanding the returns on your mutual fund investments is essential for tracking performance and making informed decisions. While some funds might be consistently doing well, others might be smaller but ultimately make a larger splash and fizzle out. This, along with the market’s volatility, is essential for investors to identify the returns they will get on their investments. 

Bajaj Finserv makes this calculation and projection very easy by offering an intuitive and easy-to-use mutual fund calculator on their app.

Here is a step-by-step guide:

1. Download the Bajaj Finserv application on your smartphone (iOS/Android)
2. Sign up using your mobile number and proceed further
3. Go to the Mutual funds under the Investment Bazaar section
4. Select the fund you want to invest in, change the investment sum and duration, and choose whether it will be a SIP or a one-time investment. 
5. By doing this, you should understand the projected return on investment and make informed decisions. 

Conclusion

So stay ahead of the curve for those important planned and unplanned expenses that can’t be missed and make the right investment decision. Whether it is for your child’s future education, to buy a house, or maybe for your retirement, you always have more than what you started with.