6 Mistakes you should avoid while Investing in Mutual Funds

6 Mistakes you should avoid while Investing in Mutual Funds:

1. Investing in a Wrong Fund
   One of the biggest mistakes is a wrong judgement call. Ensure your MFs meet your investment objective. Otherwise, that investment will not work for you.


2. Herd Mentality
   Your friend or neighbor or relative suggested a Mutual Fund and you promptly invested without any research? What if it does not suit your risk profile or investment objective? Avoid following their advice blindly. Kindly do your due diligence.


3. Taking concentrated bets
   Mutual Funds are diversified, but that does not mean you invest all your money into a single Fund. You should always diversify further by investing in a Equity, Debt and Balanced Funds according your investment horizon.


4. Stopping your SIPs in market Fall
   Panic reactions are investor's worst enemy. If you did your due research and trust your analysis, then don't stop investing or sell in a panic. There will always be tough times. Consider these falls as opportunities.


5. Dividends Over Growth
   Unless you really need a secondary source of income, it's best to go for Growth options. This is the way you compound your returns in the long term. And compounding is a Magic.


6. Falling in Love with Laggards
   If your Mutual Fund is consistently under-performing to its peers and benchmark too for more than 4 quarters. It is time to exit that option 

You can go through following video to understand other financial mistakes you should avoid.