How To Invest In Mutual Funds For A Tax Free Retirement

How to invest in mutual funds for long term investors is a subject which is constantly increasing in popularity. This is partly because of the difficult economic conditions which are making everyone wary about their financial future, and partly because of the tax incentives which are being offered to investors who use long term investment vehicles to prepare for their own retirement. Mutual funds offer many advantages over the traditional stock investments, and they are certainly the safest way to invest in the stock market without incurring a tax liability.

There is no doubt that mutual funds investment will become increasingly important as time goes by, because the Federal Government has clearly chosen to support it. Many workers preparing for their retirement are neither able nor willing to invest large sums of money into individual businesses, but they are able to make regular small contributions to a mutual fund. This ultra-long term investment strategy provides the greatest protection possible against short term market fluctuations, because they will play out and reverse before any money is drawn from the investment.

It has to be pointed out that investing in mutual funds is not for everyone, and that it does have some inherent disadvantages. Firstly, irrespective of all other considerations, your property is the most important consideration of all. If you cannot pay your mortgage comfortably each month, forget about making any other investments. If it is a desperate struggle, consider renting out a room in your house to help meet the payments. If you can keep the roof over your head through the tough times, you will have achieved the most important objective of all.

If this is done, and you still have money to invest for the future, mutual funds deserve serious consideration. They are tax efficient investments, but this can never be the most important consideration. If you don't make any profits, it won't matter whether there would have been any tax on them or not. What matters above all else is the realization of long term gains, and the right mutual fund can certainly help you to achieve this. The key is to find a fund manager with objectives which resonate with you, and whose judgment you can trust.

The most important consideration when learning how to invest in mutual funds is to carry out your research over many years. Don't be tempted to look at one year's results, and automatically choose the top performing fund. It may continue its run, but it may just as easily not. For long term investments, you need long term research. You also need to know whether your chosen investment will be compatible with your own investing philosophy and goals, when you are learning how to invest in mutual funds.

 

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Firm equity boosts MFs' asset base by 8% in Jan - Hindu Business Line

Hindu Business Line
Firm equity boosts MFs' asset base by 8% in Jan
Hindu Business Line
January saw a sharp increase in the equity AUM of the mutual fund industry due to the equity market appreciation, said analysts. The assets under management (AUM) of the mutual fund industry surged about eight per cent to Rs 6.6 lakh crore from Rs 6.1 .

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A mix of top-down and bottom-up investing can generate superior returns - MoneyGuru India

A mix of top-down and bottom-up investing can generate superior returns
MoneyGuru India
By NIMESH SHAH, ICICI PRU MUTUAL FUND The recent stock market rally has been more global driven than India centric given that it has primarily been a result of the FII inflow driven by global liquidity easing. However, we believe for the rally to be .

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Lost faith in your SIP? Don't give up - Hindustan Times

Lost faith in your SIP? Don't give up
Hindustan Times
Data from Computer Age Management Services (CAMS), a registrar and transfer agent to a number of mutual funds, shows that spooked investors are voting with their money and the number of ceased SIPs has almost doubled over the calender year 2011.

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SIPs lose shine, 1.6 m accounts closed in 2011 - Deccan Herald

India Today
SIPs lose shine, 1.6 m accounts closed in 2011
Deccan Herald
Though financial experts advise retail investors to stick to systematic investment plans (SIPs) in a fluctuating market to maximise gains, the domestic mutual fund industry with assets of over Rs 6.81 trillion is losing its grip over its most trusted .
Mass exit by small investorsIndia Today

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Entry load or not, most foreign funds got it wrong
EURWhen a fund house like Fidelity exits, it does not augur well for the Indian mutual fund industry,EUR says the chief executive officer of a leading fund house. But, he is quick to add, exits of large and well-known foreign fund houses from India are common...


Sebi tightens valuation norms for liquid funds
The Securities and Exchange Board of India (Sebi) said on Saturday it was tightening the valuation norms for liquid funds...


SIPs in mutual fund and how to best utilise them - mydigitalfc.com

SIPs in mutual fund and how to best utilise them
mydigitalfc.com
By Arnav Pandya Feb 02 2012 There are different ways in which a systematic investment plan (SIP) can be implemented. However, the investors are often in a confused state due to the different methods used by various fund houses for processing SIP.

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Poor returns hit MF investments through SIPs
Investment in equity mutual funds through systematic investment plans (SIPs), once a steady route of sticky money inflows to the fund industry, is now being hit...


 

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