How to Plan Your Retirement With Mutual Fund Investments

Millions of professionals say that the Mutual fund investments are the backbone of their investing strategy. With plenty of mutual funds to choose from, this is not an easy task to pick the best one in current market scenario. As 2017 begins, it would be better to know you about some smart fund options to consider about for the coming year. 

Mutual fund investments option for the year 2017 and beyond: There are seven best mutual fund investments scheme suggested by some of the Best financial planners (Financial planning experts) are listed below:

·         Short-Term Bond Funds: These types of mutual funds are all about playing a defensive inning. You should have some options for a definite and secure return against rising interest rates and falling equity prices.

·         Foreign Equities and Bonds: If you have a huge part of your investment portfolio in U.S security, probably you could do with some foreign exposure. Foreign developed markets are not as risky as U.S market, and they should also reduce the overall risk of the portfolio.

·         World- Stock Funds:  These funds may lift your foreign exposure only to a certain extent, but this type of fund is a balanced way to invest.

·         Emerging Market: As an investor, your emerging- market shopping should start with the Asian specialists at Matthews funds. These funds go deeper down the market-cap range; tend to run with less risk compared to their peers.

·         Large Growth Funds: In the last year 2016, the Growth Fund of America from American Funds was the largest growth fund, having $140 billion in AUM (assets under management). It is one of the highly performing funds with an average annual return of 5.8% from over last 10 years.

·         Target Date Fund: Target date funds have been produced a better return in the past few years, which means investors use these funds as well. The reason is, target date funds do not inspire greed. Investors can also make their investment steadily through market’s ups and downs. So, in order to achieve your financial goals, invest as much as possible in a target date fund and stick to it. 

How to achieve your financial goals through mutual fund investments?

Everybody has some financial goals, they want to achieve in their life. These goals may include buying a house, going abroad for a holiday, buying a car, saving for children and building a corpus for a safe retirement life. Realizing all these goals are challenging for most of the people if they take into account our present financial liabilities. Therefore, these goals are challenging, but not impossible. You can work towards your goals by following a well strategized financial plan. 

Mutual funds are one of the best market-linked instruments that can help you achieve your goals. However below mentioned are a few pointers that you help you with better mutual fund investment decision making and should not be ignored:

·         Identify your current financial status: The first step towards your Financial Planning is to know your present financial status, which includes your present income, monthly expenses, per month saving, and current investments. This step will help you to calculate the money and time horizon required to fulfil your goals.

·         Know your risk adjustment: Each asset class carries some risks with itself. So, the next step is to find the asset class suitable to your risk appetite, largely depend on your income level, liquidity, age and investment time horizon.

·         Determine asset allocation depends upon your financial goals: Asset allocation is the process of assigning your investible surplus across different asset classes for fulfilling your goal and hence, it will be good for you to determine asset allocation on the basis of short term and long term goals.

·         Security Selection: The final step is to reduce your risk by diversifying your portfolio within different asset classes. Invest in three or four diversified multi-cap funds is one of the better options to do so. Fund managers have the flexibility to align investments, according to changing market conditions.

According to the ongoing market volatilities, it is important for an investor to have a better portfolio, which can be obtained by the above steps. Besides, an investor should keep in mind a simple, modern day adage - Start early, invest regularly and be updated about the market scenario on their own or with the help of the Best Financial Planners.