Best Mutual Funds for Investment in August 2020: A Comprehensive Guide
Mutual funds are a popular investment choice for many investors due to their flexibility and diversification benefits. However, choosing the right mutual fund to invest in, especially in a specific month like August 2020, can be a daunting task. While it might seem like mutual funds are only suitable for certain months, the truth is that you can start investing in any month, regardless of the market conditions. This article provides insights into determining the best mutual funds for investment in August 2020, along with considerations for various investment strategies.
Understanding Mutual Funds and Their Flexibility
Mutual funds are investment vehicles that pool money from multiple investors to create a single investment portfolio. These funds are managed by professional fund managers who invest in a diversified range of assets, such as stocks, bonds, or a mix of both. Unlike stocks, mutual funds can be bought or sold at any time during the trading day, offering flexibility to investors.
Popular Mutual Funds in 2020
In August 2020, several mutual funds distinguished themselves with their performance and investor ratings. Two notable funds to consider are:
Axis Blue Chip Fund
The Axis Blue Chip Fund is one of the top-performing large-cap funds in the market. This fund invests in large and well-established companies in the Indian market, known for their stable performance and long-term growth potential. The fund’s consistent performance over the years has earned it a five-star rating from leading fund evaluation agencies. Regular investors can benefit from the systematic investment plan (SIP) option, which helps in averaging the cost of investments over time, reducing the impact of volatility in the market.
Mirae Asset Emerging Businesses Fund
The Mirae Asset Emerging Businesses Fund focuses on investing in emerging businesses that show potential for significant growth. This fund is ideal for investors who are willing to take on a higher risk for the possibility of higher returns. With a strong management team and a focus on identifying innovative and disruptive startups, this fund can be a compelling choice for investors looking to benefit from the rapid growth in certain sectors.
Considering the Current Market Conditions
When evaluating mutual funds, it is crucial to consider the current market conditions and your personal investment goals. The investment market is inherently volatile, and past performance is not a guarantee of future returns. Therefore, it is advisable to diversify your investments and choose funds that align with your risk appetite and time horizon.
Long-Term Investment Strategy
If your investment strategy is for the long term, there is no need to wait for a specific month like August 2020. Starting to invest even during a period of market correction can be beneficial due to the principle of dollar-cost averaging. By investing regularly, you can buy more units of the fund when the market is down and fewer units when the market is up, thereby averaging the cost and reducing the overall impact of market fluctuations.
Short-Term Investment Considerations
For investors with a short-term investment plan, market stability is key. If you are looking to invest in August 2020, it might be wise to hold off until market conditions stabilize. Market stability provides a clearer picture of the investment landscape, making it easier to choose the right fund. However, it is important to note that no one can predict the future with certainty, and the best mutual fund for August 2020 might not guarantee high returns. It is always advisable to conduct thorough research and seek professional advice before making investment decisions.
Conclusion
The best mutual funds for investment in August 2020 will depend on your individual financial situation and investment goals. While Axis Blue Chip Fund and Mirae Asset Emerging Businesses Fund are strong contenders, the choice ultimately lies in aligning the fund with your risk tolerance and investment horizon. Regardless of the month, it is crucial to approach investing with a long-term perspective, diversify your portfolio, and stay informed about market trends. By doing so, you can make more informed and strategic investment decisions, ultimately enhancing your financial health and wealth.