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This is where it gets a bit subjective because not all fund investors are the same.

We’ve seen fund investors who don’t understand mutual funds invest in mutual funds on. We’ve also seen fund investors who are extremely savvy and curious.

Irrespective of what type of investor you are, there are some basic duties that you must attend to. Few argue that fund investors should stay away from these matters as much as possible but that’s not true. One shouldn’t hand over the complete control to the advisor. At least not without discussing what is the plan the advisor intends to execute.

Understand the very basics

As an investor, understand the very basics of mutual funds. Here are the questions you must be able to answer –

  • What is a mutual fund?
  • What are the types of mutual funds?
  • What are the tax implications of mutual fund investments?
  • Basic terminology like NAV, SIP etc.

Ask questions and understand things at surface level

While investing may be overwhelming for someone who doesn’t come from a financial background, I believe understanding investing at a surface level is possible for everyone.

For example – You can ask why a certain fund scheme is a part of your portfolio.

You might not be able to grasp technical terms like rolling returns, standard deviation, alpha etc. But you can certainly understand why a fund scheme is there in your portfolio. If it is an equity fund, maybe it is there for capital appreciation in the long term. If it is a debt fund, maybe it is there to stabilize the portfolio during volatile times.

Revisit your portfolio every few years

Investing is not a one-time process.

It needs adjustments every now and then. The portfolio needs to be maintained and asset allocation revisited.

While these adjustments will be done by your advisor, make sure you are there to remind him.

Revisiting your portfolio every 3 years sounds like a good plan!

Also Read: What are the roles of mutual fund managers?

What is the role of mutual fund investors?

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