There are certain mistakes investors make quite often when it comes to ELSS investment. Following are some of them:
Waiting Till March for Investment
This is a very common tendency of investors. They wait till march for the investment to be done. Either it is about not in priority, lack of funds, lack of clarity, or expectation to time the market. SIP is the simplest answer to all these challenges.
Redeeming Funds Immediately After Lock-In Period
Patience is the name of the game. Longer duration of investment gives better return. But at times investors have the mindset of only getting his money back. This is a result of not knowing the advantage of long term investment or not having a purpose for investment. An advisor, preferably a CFP can help you in your need analysis and long term goal planning.
Not Paying Attention to the Risk Factors Involved
Yes, mutual fund investment is subject to market risk. Also,one needs to check how aggressive his fund is. Not sure about how to minimize the risk? How about taking help of an advisor?
Considering Only Short Term Performance
Last year’s return is not going to be the next year’s return, at least one cannot guarantee. An advisor can help you decide what is the best strategy or fund to invest considering the current phase of the market.
Saving Only for Tax
Yes, ELSS mutual funds give you the tax saving advantage. But don’t make it your sole purpose. You can plan your long term goals with them, like retirement or your child’s higher education.
For all your Mutual Fund queries and to invest in one you can call us on 9879956949 or email us on hardik@niveshplanner.com.