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4 effective tips to identify a good child investment plan

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For many parents in India; it is quite challenging to identify the right child saving & investment plan for their children. They usually think that investments in plans like Mutual Funds, Endowment Plan or ULIPs will go to be a risky decision for them. But, as a parent, you need to trust on mutual funds for future investment because the plans offer a right avenue to the investor. Both equity mutual funds and Debt mutual funds are safe for investors as they have low risk appetites. Today, investment in mutual funds became a prominent tool to enjoy the higher returns after the completion of respective tenure. As a parent, when you prefer Mutual funds investment for your child, you actually step in a professional marketing world where your fund manager professionally tracks the market & manages your investment at every stage. Also, all mutual fund are governed by most trustable financial body i.e. SEBI which assures an investor about the security and transparency of investment plan.

For those parents who’re in confusion regarding choosing a good investment plan, here are some important tips that will help them to identify the reliable & beneficial plan for their child’s future.

Decide your investment goal:- When you look a future investment plan for your child, you need to be precise about the objectives and goals for investment. Like other parent, you might be having a dream of your child’s bright future which will conduct with implementation of a concrete plan. After deciding your objectives, you should consider the target date. Goals oriented long term investments provides attractive return despite of deviation in the market. However if your goal is below 5 years; it is advisable to not touch equity products & choose debt funds so as to get decent return.

Analyze your Risk Quotient:- As an investor, before choosing any child investment or child saving plan; you must calculate the risk quotient associated with it. Generally, both return and risk go hand in hand and sometimes it also affects estimated expected returns. However, if you perfectly analyze the risk quotient for your investment, the chance of getting potential returns becomes twice. You can take financial advice to analyze the risk and choose the right funds accordingly.

Track past performance of the fund:- Before investing on any mutual fund, it is essential to an investor to analyze the past performance of the fund. Such monitoring gives an overview about the effectiveness & reliability of the policy. However, sometimes it is difficult to predict the future performance of any mutual fund by just analyzing & research its history. In such cases, it is recommended to keep yourself updated with the market news. You should also research about market movement & upcoming projects of Mutual funds to ensure a right investment.

Decide your investment amount:- Before buying a child saving plan, you need to be calculative in every aspect. When you identify a good investment plan and analyze its future cost, the next question you need to answer is ‘how much will you invest every month?’ To decide the amount, it is better to first consult with your financial advisor to ensure assumed return after the maturity period of your plan.

While choosing an investment plan for your child, your initiations is very important. So, analyze your fund carefully and identify the good one to secure your child’s future.

Mr. Ajay Kumar Jain, M.Sc, Chairman And Managing Director
Being the Chairman And Managing Director, he focuses on holistic investment planning and wealth management and tries to make investment planning simpler for retail and HNI investors. Investor education is one of the prime things that Mr. Ajay Jain focuses on as he believes financial education is the foundation of successful investing. With over two decades of experience, Mr. Jain has made a mark in the Indian mutual fund industry due to his compassion and sheer hard work.

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