Mutual Fund Investments: Planning for a Brighter Financial Future

There is a very old saying "Failing to plan is planning to fail". This may sound simplistic but people who wish to be successful should always plan before doing any activity.

The world that you live in is very dynamic. Things change in a split second, so you should have a plan to prepare yourself face those uncertain changes and not let your daily routine be affected by that. People today, have understood the importance of planning right from the beginning, so in future, they are ready to face any unfortunate event.

Investments should also be done with proper planning and homework. The key for successful investment planning is proper asset allocation. Asset allocation is investing your savings in appropriate sectors and fields, so that you get decent returns in the future, that you anticipate, will help you achieve your financial goals. As an investor, you need to make sure that you carefully study the various processes involved in investments, how they work and have you properly allocated your hard earned money in different asset classes in order to fulfill your investment objective.

There are two very important factors that can have a great impact on asset allocation:

Time horizon refers to the duration for which the person desires to invest the money in any particular field. Every person has a specific financial goal in mind and the time horizon can play a significant role in helping the person achieve that financial goal. Therefore the asset allocation of a 25 year old planning for retirement and a 40 year old planning for retirement will be quite different, even though their end goal is the same.

Risk tolerance is another key factor in asset allocation. The willingness and ability to lose part or whole of the money invested in return for larger potential returns is termed as risk tolerance.

Larger risk in investment is directly proportional to larger chances of revenue generated. Investors who are highly aggressive often accept investments with high risk in the hope of getting better results. Investors with lower risk tolerance are tagged as conservative investors. They invest money in avenues which offer lesser risk, but do not earn as much return.

A portfolio designed to cut down the risk by combining investments of different asset classes, i.e. equity, debt and gold, which generally doesn’t moves in similar direction in terms of market movements is termed as diversification. The prime aim of diversification is risk mitigation. Diversification paves the way for more reliable and steady performances of the various asset classes under changing economic conditions.

Another adage springs to mind when one thinks of diversification - "Never put all your eggs in one basket." Diversification is nothing but splitting those eggs appropriately, so even if one basket breaks, you do not face too many losses.

The Quantum Multi Asset Fund uses diversification as its key strategy to invest across multiple asset classes from a combined portfolio of equity, debt / money markets and gold schemes of Quantum Mutual Fund. The fund aims to generate modest capital appreciation while trying to reduce risk by diversifying it across asset classes. Apart from research backed optimal asset allocation, Quantum Multi Asset Fund also provides you the advantage of investing in one single scheme and hence monitoring and rebalancing portfolio becomes easy for investors.

The Quantum Multi Asset Fund also gives you the opportunity to invest through Systematic Investment Plan (SIP) and allows you to start diversifying your portfolio with an amount as low as Rs. 100. SIP is a means of investing in a disciplined manner, irrespective of the state of the market.

So, take your first step to plan and diversify your investments by parking a part of your savings in the Quantum Multi Asset Fund!