Method to Select Mutual Fund

Mutual funds are among the most popular investment options. They are an investment scheme that assembles the funds of several investors into investing pool to create an investment product. One can invest in mutual funds through a systematic investment plan or via a one-time investment. 

Steps to choose the right mutual fund

1. Know your goal-Decide goal, the time frame you are looking to invest for, return expectations before choosing the mutual fund. Once these goals are ready think of a mutual fund.

2. Do research-It's important to do research before starting your investment. Risk tolerance, investment horizon, investment knowledge, return expectation are several parameters to consider before picking the mutual fund.

3. Check the expense ratio-Expense ratio is important as it comes out of your returns. Choose the mutual fund that comes with a lower expense ratio. The expense ratio reflects the value for money aspect of a fund.

4. Lower standard deviation-Standard deviation shows the consistency of an investment return. High standard deviations show price volatility, but the low standard deviation is more predictable.

5. High alpha-A high alpha is always good. Alpha shows how well a stock has performed in comparison to a benchmark. Fund's alpha gives an overview of the fund manager's skills. 

6. Tax implications-Mutual fund schemes offer tax deductions. Investors can avail tax-efficient returns from mutual funds.

Thus, starting the investment journey can be a difficult task but once you start investing it becomes a healthy habit that helps to build wealth.