Every individual has dreams, and most of the times, these dreams require a large corpus in order to be fulfilled. Some wish to buy a bigger home, while others wish to build a wealthy retirement corpus, some wish to save enough so they can secure their child’s future, while others want to save enough so that they can go on that Europe tour they always wanted. No matter what your dream is, it is advisable that investors are able to figure out how much money they need in total, in order to achieve what they seek. The point we are trying to make here is, having a defined financial goal always helps. When you know how much money you actually need if helps in analyzing the kind of money you need and the types of investments you need to diversify your portfolio with.
Conservative investors who usually don’t wish to take a lot of risk with their investments, opt for traditional investment tools like bank fixed deposit, public provident fund, national pension scheme, etc. On the other hand, investors eager to take risks with the hope of fetching better returns than traditional instruments can consider investing in equity oriented mutual funds. These funds predominantly invest in equity and equity related instruments along with other asset classes like debt, corporate bonds, government securities, etc.
Have you heard of bluechip funds?
Bluechip funds are those equity funds which heavily invest in stocks of well-reputed companies. Because these funds invest in company stock of those companies who have a proven track record of garnering profits year after year, investing in bluechip funds is considered to be a lot less risky as compared to other equity funds.
That’s not it.
Here are a few more reasons why you must add bluechip funds in your investment portfolio:
Bluechip funds are basically equity funds investing in financially established companies having large market capitalization. Historically, equity schemes have managed to give decent returns when held for the long run. So it would be better if investors have a long term investment objective especially if they wish to invest in bluechip funds. This way, they stand a chance to fetch some decent returns.
2. Bluechip funds offer liquidity
It is evident that investors need to give their portfolio some liquidity. The future is unknown and unfortunate circumstances can arise leaving you in dire need to cash. Bluechip funds usually do not have any exit load; neither do they have any lock in period. This makes them an ideal choice for those investors who wish to add some liquidity to their portfolio.
3. Bluechip funds offer diversification
Bluechip funds are one of its own kind. They are different from other mutual funds and are a great choice for those looking to diversify their portfolio. Diversification also means that they hold the potential to reduce risk and maintain the balance of your overall portfolio.
4. Bluechip funds allow SIP investment
Investors can choose SIP payment option to give their bluechip funds a systematic approach. Systematic Investment Plan or SIP is an electronic payment method where an investor can continue investing in their bluechip funds from the comfort of their smartphone or laptop. All an investor needs to do is instruct their respective bank, and every month on a predetermined date, a fixed amount is debited from their account and transferred to their bluechip fund.
5. Bluechip funds carry lesser risk
As mentioned earlier, bluechip funds invest in stocks of financially stable companies. Although there is less scope for such company stocks to make commendable profits, considering they’ve already flourished to their fullest potential, they are a lot safer than other equity mutual funds. Hence investors with low risk appetite seeking long term equity investment can consider investing in bluechip funds.
Investing in mutual funds is like a long flight journey. At the end of your flight journey is a beautiful vacation destination that awaits you and similarly, at the end of an investment journey there’s a wealthy corpus that awaits you. Just like you change flights in between your journey, you might have to shift between funds to make sure that you continue to make profits without bearing any losses. Do not invest beyond your limits, or get carried away by investment trends. Stick to your investment strategy and one day, and you too might be able to achieve your ultimate financial goal.