Buying mutual funds online is now easy. You can invest from anywhere with just a few clicks. But, this ease can lead to mistakes.
New investors often make errors that can cost them a lot. Whether you’re new or already investing, knowing these mistakes is crucial.
Here are 5 mistakes to avoid when buying mutual funds online. They are explained simply with examples.
❌ Mistake 1: Choosing a Fund Just Because It Gave High Returns in the Past
Your friend might tell you about a fund that did well last year. You might quickly invest in it online. But, the next year, it might not do as well.
This happens because past results don’t predict future performance.
✅ What to do instead:
Always look at a fund’s performance over 3, 5, or 10 years.
See how it does during market ups and downs.
Get advice from a financial advisor if unsure.
Tip: Look for “consistently performing funds,” not “recent top performers.”
❌ Mistake 2: Ignoring Fund Type and Risk Level
There are many types of mutual funds – equity, debt, hybrid, ELSS, etc.
Each has its own risk and return level.
For short-term savings, high-risk equity funds might not be the best. For long-term goals, they might not grow enough.
✅ What to do instead:
Choose a fund type that matches your goal and risk level.
Read the fund’s riskometer and category details before buying.
For long-term goals, SIPs in equity mutual funds are usually better.
❌ Mistake 3: Investing Without a Goal
Investing without a goal is like starting a journey without a destination. It’s not wise.
Many invest without a goal, thinking “mutual funds sahi hai.” But, this can lead to mistakes.
They might stop their SIP, redeem at the wrong time, or choose the wrong fund duration.
✅ What to do instead:
Set clear goals like “Child’s Education by 2038” or “Buy Home in 2030.”
Choose the right fund type and investment amount based on your goal.
Use SIP calculators online to plan better.
❌ Mistake 4: Investing Through Untrusted Platforms
Many apps and websites offer mutual fund services today. Some charge hidden commissions or push regular plans for their benefit.
Some platforms might misuse your KYC data or give wrong suggestions.
✅ What to do instead:
Use trusted platforms like:
AMC websites (like SBI, HDFC, Axis)
Zerodha Coin, Groww, Paytm Money, Kuvera
If investing through an advisor, check if they are AMFI-registered.
Read reviews before uploading personal documents.
❌ Mistake 5: Not Reviewing Your Investments Regularly
Investing is not a one-time thing. You should review your mutual fund portfolio at least once a year.
A fund that was doing well might not anymore. Or your goal might have changed.
Some people don’t check their investments for years and then get shocked to see poor returns or losses.
✅ What to do instead:
Set a reminder to review your portfolio every 6 to 12 months.
Rebalance if your fund is not performing or your goal changes.
Track your fund’s performance using apps like ET Money, Groww, or Morningstar.
🎯 Real-Life Example (Storytime)
Ravi, a 30-year-old IT professional, heard about a mutual fund giving 40% return last year. Without checking anything, he invested ₹50,000 in it online.
The fund was a sectoral fund – very risky and volatile.
After 6 months, the fund dropped by -12%, and Ravi panicked. He sold the fund at a loss. Had he invested in a diversified SIP, he would have stayed more stable and stress-free.
Moral of the story: Don’t follow others blindly. Make your own informed decisions.
🧠 Final Words: Be a Smart Investor in the Digital Age
Investing in mutual funds online is like shopping online – it’s fast and convenient. But like you read reviews before buying a mobile or gadget, you must do research before buying a mutual fund.
Let’s quickly recap the 5 common mistakes to avoid:
1. Trusting past returns blindly
2. Ignoring fund type and risk level
3. Investing without clear goals
4. Using untrusted platforms
5. Not reviewing your investments
Avoiding these mistakes will help you make smarter, safer, and more rewarding investments.
📌 Bonus Tips for Beginners:
Prefer SIP over lump sum if you’re just starting.
Don’t stop SIPs when markets fall – that’s the best time to invest more!
Use tools like SIP calculators, goal planners, and fund comparison charts.
Always choose Direct Plans if you’re confident, or use a SEBI-registered advisor.
FAQs: Mutual Fund Buying Mistakes
Q1. Should I always invest in the top-rated mutual funds?
👉 No. Ratings change over time. Look for long-term performance, risk level, and fund category.
Q2. Can I lose money in mutual funds?
👉 Yes, especially in equity funds. But if you stay invested long-term (5-10+ years), chances of loss reduce.
Q3. Are SIPs better than lump sum investments?
👉 For beginners, yes. SIPs average out market ups and downs. Lump sum is risky in volatile markets
Q4. How do I know which fund suits my goal?
👉 Use goal-based tools or talk to a SEBI-registered advisor. Also check the fund’s historical data
Q5. What is a Direct Plan?
👉 A mutual fund plan without any commission or middleman. You can invest directly from AMC websites or trusted online platforms.
📣 Call to Action
Are you planning to start your mutual fund journey in 2025?
✅ Want help choosing the right SIPs or funds based on your goal?
📩 Contact us at support@finsecurepro.com
🌐 Or visit finsecurepro.com
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