Long-term investment involves holding assets for an extended period, typically for years or decades. This approach is advantageous as it effectively utilises compounding for substantial returns, allows investors to ride out market volatility, and provides stability against short-term fluctuations.
Planning an effective long-term mutual fund strategy requires a thoughtful and well-considered approach. Firstly, clearly define your financial goals and time horizon. Identify the purpose of your investments, whether it's retirement planning, education funding, wealth accumulation or other. Next, assess your risk tolerance to determine the level of volatility you can comfortably handle. Lastly, according to your goals and risk tolerance, choose a mix of mutual funds that align with your objectives.
Diversification is a key principle in constructing a strong mutual fund portfolio. By scattering investments across different asset classes, you can
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