Indian families today have awakened to the importance of investing in mutual funds in order to fulfill their child’s aspirations. With the ever-increasing cost of living and inflation, it has become important for people to make investments in mutual funds in order to earn some extra funds, without which an average man’s entire salary will be spent towards the regular expenses, without any savings for future needs. It is also interesting to note how in spite of an increase in the formation of nuclear families in the country, parents have managed to retain an emotional bonding with their children, as a result of which they aspire to fulfill their small aspirations and dreams, whether it is a wish to pursue their further education abroad, or pursue an unconventional career. Today everything is possible with additional savings in the profitable world of mutual funds in a strategic and planned manner.
When you make investments in mutual funds, in your child’s name, you are presenting a gift of efficient, systematic, convenient, and comfortable investments, which will accumulate wealth for several years, over a period of time, while inculcating the values of savings and investments in them. These funds can then be used at the right time to put your dreams into action. Mutual funds invest in a wide variety of categories that are fixed income instruments with high income and marginal risk, and which range from real estate, to bonds, and the safer and most favored choice of gold. Although the stock markets function in a manner, which account to a constant and unpredictable rise and fall in the market, one cannot deny that as an investor we aren’t completely powerless. This is due to asset allocation, which helps us successfully counter volatile fall of markets. Asset allocation refers to nothing but how an investor makes investments in different classes of assets, in such a manner, that he is able to fulfill the desired financial goals for his child in the stipulated period of time. It isn’t a very difficult task as mutual funds are inherent with the concept of asset allocation, thereby making them a favorite investment option among investors in the country. You can choose to make investments in them depending on how much you can contribute on a regular basis, by shelling out even as little as Rs. 100. You must also remember that the riskier the investment, greater will be the probability of higher returns. When beginning your foray in the world of investments for your child, make sure to opt for less riskier funds as they add stability and security to your portfolio. Once you are accustomed to the behavior of the markets, you can play with the different kinds of funds up on offer.
As every investor has different needs and requirements, try to stick to the basics and make sure that you evaluate your funds on a regular basis. This will help you walk out of an unprofitable funds at the earliest, before you draw on huge losses. Thus, with the rising cost of education, real estate and marriage expenses, it is imperative that you start saving early for your child, so as to possess the desired amount of money at the right time. This will avert you from the possibility of buying debt like a personal loan or any other kind of loan to fulfill your responsibilities towards your child. Doing so, not only you secure a financial future but also have led way to borrow credit if required in future not only for your child but also for various other purposes like building a house, purchasing the car etc.