How To Buy and Sell Mutual Funds

 

Buy Mutual Funds

Mutual funds have been around in India for nearly three decades now, but the number of people who actively buy and sell mutual funds in the country remains abysmally low as a percentage of the population.

The fundamental reason for poor participation in the mutual fund market is the lack of awareness; not just about the benefits of mutual funds, but also the knowledge of how to buy mutual funds and sell them.

You have tackled the question of how mutual funds help you achieve your investment goals in earlier chapters. Now, let's go through the process of how to buying mutual funds.

HOW TO BUY MUTUAL FUNDS :

Mutual funds are versatile instruments that can be bought and sold in a variety of ways. Once you get all your paperwork in order, here are some of the various ways you can acquire mutual funds in India.

HOW TO SELL MUTUAL FUNDS :

If you thought the amount of research done for buying a mutual fund was hard work, you’re about to repeat a lot of such work while selling your mutual funds. You need to do your homework and sell your mutual funds only if the timing is right to ensure that you always make a profit on your sale.

Do you see yourself in any of the scenarios? Then it’s probably a good idea to sell your funds and cut your losses early on.

There are two ways to sell your mutual funds – to another investor or back to the mutual fund. The latter is called redemption of mutual fund. Mutual funds are best redeemed the same route through which they are purchased. This means you could choose to redeem them online or offline, through an agent or broker or directly by yourself.

However, remember to check for any exit load or charges for sale of your MF units. This will be deducted from your total proceeds from the sale.

COMMON MISTAKES TO AVOID WHEN BUYING AND SELLING MUTUAL FUNDS

Mutual funds are managed portfolios of stocks, bonds and securities that offer investors the perks of participating in the stock market, but with a limited exposure to the risks involved.

Since this is the case, the need for 24 x 7 monitoring of your investments is probably unnecessary. However, this does not mean that you go into this process of investing in mutual funds completely blind and then live to regret your rash decisions.