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Picking mutual funds for investment is easier than picking the right time to invest in them. We give you five hints to help you choose.

Every investor knows that in order to make money, he must put the money he currently has to good use. Simply letting the money sit in the bank or investing it in such instruments as real estate and gold do not always yield the best results. Besides, if the investor has both short term and long term goals, he may need to look at mutual fund investment.

But despite wishing to invest in mutual funds in India, many factors can hold an investor back. In terms of mutual funds, ‘how’ is often not as important as ‘when’. Consider these five pointers to help yourself decide when to invest in mutual funds:

1 When you do your research.

You must be willing to put in hours of study on both the fund you are interested in and the fund house. Choosing the best mutual funds cannot be a snap decision, and it cannot be based on the current favourite in the market. The fund you purchase must offer the potential for growth that you seek to realise your short term and long term financial goals. Apart from the fund, you must select the right fund manager as well. Conducting due diligence is the crucial first step to investing in the best mutual funds in India.

2 Study the fund manager’s record over three years.

Investors are often tempted to see short term results of the fund manager they wish to work with. However, experts will tell you that any amount of time short of three years is too less to analyse the manager’s performance. Analyse his track record over three to five years and discuss the various strategies he has adopted over the years vis-à-vis market fluctuations and asset allocation.

3 Choose a manager with the same investment style as yours.

A fund manager is not a magician who can convert your mutual fund investment into piles of money. Nor is he a mathematician who follows provable theorems with predictable outcomes. A fund manager studies the markets and interprets them every day, and bases his decisions on his understanding and skill. The gains may be slow in coming in some cases, while another of his decisions can fetch a windfall. However, his investment style must align with yours, or there may be conflict in reaching your fiscal goals.

4 Pick the fund of the best available ones.

Studying market forces every day and picking the right mutual fund is important for the proper realisation of your financial goals. Most people tend to go with the popular choice, or expect a long term fund to generate constant growth in the short term. Discussing the fund’s growth with your manager regularly, reading reports by financial companies and looking up the workings of the best mutual funds relays valuable information.

5 Be certain that it is the best way to create wealth.

Investing in mutual funds is a matter of faith and being open to a little risk. Sometimes, all calculations can go awry and mutual funds may show extremely low returns. Hence, it is important to be convinced about the decision to invest in a mutual fund. Only when the investor is certain that they will give the best returns will the investor be confident about putting in his money in them.

In 2005, I began working with a new client. She just got divorced after over 30 years of marriage. Like many women, she had been content to allow her husband to take care of their finances. However, circumstances changed. In her late 50s, this woman found herself in uncharted waters: managing significant financial matters with zero prior experience.

While insurance, investments and financial planning have traditionally been “a man’s game,” there are many statistics that predict a different story. Women are living significantly longer than men and are more likely to become widows. Like it or not, it’s imperative for women stay on top of all things financial, for themselves and their families.

There are many aspects to financial planning: savings, retirement, day-to-day expenses, student loans, college savings, estate management, building a comprehensive stock market portfolio, life insurance, and more! It can get overwhelming trying to keeping track of every aspect of your broad financial plan. Here are four tips to get started:

1) Make it fun. Financial planning is not something that brings an immediate smile to one’s face. Try to take the stress out of it by making your conversations fun. Plan a “date night” where you cook together and go over one aspect of the finances over dinner. Don’t try to go out: restaurants are wonderful for romance, but not great for private financial conversations. Whatever it is you enjoy, try to mix that in so you can associate something positive with this new learning adventure.

2) Don’t get defensive. Your goal is to become more educated and involved in your family’s finances. This doesn’t have to be a cause for alarm or fighting! Remind whoever is currently in charge that this is not a criticism of what they have been doing. You are not going to change things overnight or perhaps even at all, so do not start out on the defensive.

3) Start with cash flow. In terms of where to start, I recommend beginning with the basics: cash flow. Where are funds currently being spent and allocated? How are new expenses prioritized? This is a good time to analyze expenses both from a high level and then more detailed. We get busy with our daily lives and while a $100/year item may not be significant—how many of them are there? Those can really add up.

4) Meet and engage with your team. Do you personally know your CPA, attorney, and financial professionals? Start to build a relationship with them. Make sure you understand how they make decisions, how they bill, and how they can help you and your partner reach your goals.

Starting the process is half the battle,and there is no wrong answer when deciding which area to approach first. Remember that this is a team effort between you and your family, spouse, or partner, so don’t try to go it alone. By following these steps,I believe you will become more empowered to make smart financial decisions in good times and in bad.

Meghann McKenna is Owner & Financial Adviser at McKenna Financial in Bozeman MT, a family owned financial firm serving clients since 1949. She also is a Registered Representative offering securities through NYLIFE Securities LLC, Member FINRA/SIPC a Licensed Insurance Agency, and a Financial Adviser offering investment advisory services through Eagle Strategies LLC, a Registered Investment Adviser. McKenna Financial is not owned or operated by Eagle Strategies LLC or its affiliates. This article is offered for general information purposes only. It does not set forth solutions to individual situations. Consult your professional advisor(s) before implementing any planning strategies. SMRU 1683868 (exp. 2.18.2018)

When creating an overall financial portfolio, investors typically consider how to allocate assets into categories such as growth, income, and cash or cash equivalents. But, often they will tend to forget about something that, without it, could be detrimental to literally everything else that they’ve worked for. That is life insurance.

Life insurance is, in many ways, one of the most essential elements in a financial portfolio. This is because it can provide protection for all of the other assets – especially in the case of the unexpected.

For example, in its most basic sense, life insurance is made to protect a surviving spouse or loved ones from the financial consequences of unpaid debt and / or ongoing living expenses should a primary income earner pass away.

But life insurance can also be used in other financial planning areas, too.

Using Life Insurance for Diversification

In addition to death benefit protection, there are many life insurance policies that will also provide policy holders with a way to protect their cash value from market volatility, as well as from the high cost of a long-term care need.

In other cases, cash value life insurance can also be used as a primary or a secondary financial vehicle for saving for a child’s or a grandchild’s future college education expenses – and oftentimes this can provide a much more flexible mechanism even than the 529 college savings plan.

Life Insurance as an Income Supplement

If structured in the proper manner, certain cash value life insurance policies today can also be set up to help policy holders in supplementing their retirement income on a tax-free basis. With all permanent life insurance policies, cash value is allowed to grow tax-deferred. This means that there are no taxes due on the gain on those funds until the time they are withdrawn.

In many cases, a life insurance policy owner will either borrow or withdraw their cash value for a variety of different needs. These can include paying off loans, funding the college expenses of a child or a grandchild, or even taking a nice vacation.

The money that is taken out as a loan will not be taxed to the policy holder – and, it can typically be borrowed at very low interest rates (usually quite a bit lower than that of a bank or other lender).

Over the past several years, many pre-retirees have been taking advantage of the many benefits that indexed universal life insurance (IUL) can provide. This is because the cash in these policies has the opportunity to increase based on market indexed linked growth, yet it is protected from downward market movements by being credited with a return of 0% in negative periods.

Cash can be borrowed tax-free in order to supplement retirement income – and, if the policy holder passes away, any unpaid loan balance will simply be charged against the death benefit that is paid out to the policy’s beneficiary.

Making Your Financial Plan Complete

In all, while life insurance should still be considered for its death benefit protection, it also has so much more to offer – and because of that, it should not be thought of as just a “stand alone” product, but rather as an important and essential piece of the overall financial planning puzzle.

When constructing your overall financial plan, it’s important to be sure that you have the right type and amount of life insurance coverage. This is because you don’t want to leave your loved ones short just in case of the unexpected.

When choosing your life insurance plan, know that not all policies are the same, so you want to be sure that you shop for the policy, the benefits, and the insurer that will be the best for you and your specific needs and goals.

An independent insurance advisor can help you to fit the coverage to your plan, as versus the other way around. By working with many different life insurance carriers, going with an independent agency will allow you to shop in an unbiased manner while putting all of the pieces together when you’re ready to move forward.

Traditional assets consist of stocks, bonds, or money. Individuals capitalize in such products with the expectation of capital appreciation, surplus on the original investment, and earnings on interest. For many years, people have been limited to financing only these asset products.

Alternative investments have created a broader field for individuals to capitalize in. This type of investment relies upon asset classes that have little to no correlation with more traditional forms of ventures.

Types of Alternate Financing

Private equity: there are a greater number of private corporations than there are public ones. These private companies tend to take on investor capital. Private equity firms are essentially ones that raise the necessary funds from a variety of investors. These resources will then be placed with favorable private corporations. The money is then returned to investors once an IPO or acquisition has taken place.

Venture capital: this is a division of private equity. Here the investment takes place among companies that are just beginning, before they have had a chance to grow. Venture capital firms gather funds from various groups. They then disperse these reserves to a variety of companies that are just starting out. This type of financing is usually more of a gamble. In the event that these start-up corporations succeed, however, the investors can expect an impressive return of their capital.

Hedge funds: these funds consist of a compilation of several investments. These are then placed in a variety of schemes and assets. The difference between hedge funds and private equity is that hedge funds will also place ventures with public companies. There is also more liquidity offered with hedge funds. This way investors have more access to their money and can withdraw it with greater ease. Some of the more typical hedge fund strategies are distressed investments, arbitrage, and macro-trends.

Advantages of Alternate Financing

The inclusion of alternative financing asset classes in a portfolio will greatly increase its diversification. This is because they have very little or no association with more traditional asset classes such as stocks. This means that your investments are less likely to be affected by the performance of the stock market. Thus, the inclusion of this type of investment reduces the overall volatility of the portfolio.

Alternatively, this type of investment has a good correlation with inflation. This property ensures that it serves well as a hedge against inflation. This indicates that it would provide a solid return rate on a long-term investment.

In certain instances, alternate investments can actually produce greater returns than traditional investment. One of the advantages afforded to this non-traditional form of investment is the wider range of financing opportunities. The investors can choose to invest in both public and private corporations. They also face less constraints and are subject to fewer regulations. This can result in better returns subsequent to long-term performances.

Typically, these types of investments have always been considered more of a risk than stocks, bonds, or cash. It is, however, this increased gamble that can ensure that the return against the venture is also impressive.

What is life insurance?

One of the key concepts of life insurance is that it can pay any dependents you have a cash lump sum or regular payouts upon your death. It has been designed as a way of providing you with a level of reassurance that those who are dependent on you are looked after should you no longer be around.

Of course, the amount of money that will be paid out depends on the amount of cover that you purchase. You may also make decisions as to how it will be paid out and whether the money is earmarked to cover particular payments such as rent or a mortgage.

There are a couple of main types:

– The term life insurance policy runs over a fixed period, and will only pay out should you die within that period. No lump sum is redeemable at the conclusion of a term policy.

– The whole-of-life policy pays out irrespective of when you die.

What is not covered?

Life insurance does not cover disability or illness. The majority of policies have exclusions. As an example, if your death is cause by alcohol or drug abuse, there is no cover.

Should you have a particularly serious health problem when the cover is taken out, this may also be excluded from payout.

Are you in need of it?

If you have dependents – a partner who is dependent on your income, school aged children, et cetera – if you die, a life insurance policy may provide for them.

If you are unable to rely on governmental help for your family – perhaps the amount is too small – then life insurance becomes a necessity.

Who does not need it?

Your partner may earn enough income for your family to be comfortable, or you may be single, in which case, life insurance may not be required.

How much does life insurance cost?

Life insurance can be good value. Depending on your circumstances, a few pence each day can be plenty enough to provide your family with financial protection. In fact, on average, 100k life cover for a period of 10 years, for those who do not smoke and are aged 54 years, works out at less than £1 a day.

Nevertheless, monthly payments, which are also referred to as premiums, can and do vary. Thus, it’s wise policy to shop around and to find out precisely what will be covered given the amount that you are paying.

There are a number of factors that impact the amount you will pay for life insurance. That includes the policy length, the amount you wish to cover, your current health status, your current age, whether you smoke, and your current lifestyle.

As an example, a younger person who is less likely to die on account of a medical condition will enjoy a cheaper life insurance policy than otherwise.

Do you already have life insurance?

You may have an employee package which includes something called “death in service” benefits. In which case, this covers you for a certain multiple of your income and as such, you may not be in need of any life insurance.

You do need assess whether this policy will provide enough cover in the event of your death or whether you should opt for additional cover.
Do keep in mind that if you no longer work for this employer, you will lose your coverage under this policy.

Consider other forms of insurance

Life insurance will cover a worst-case scenario, though you should also consider other matters such as bill payments and your mortgage if you are unable to work due to injury or illness.

You may benefit from income protection insurance. Income protection insurance provides for regular payments if you are unable to work on account of injury or illness.

Perhaps instead you need critical illness insurance. Critical illness insurance provides you with a lump sum which is tax-free should you be diagnosed with a serious illness that is under the provision of your policy.

Think also about payment protection insurance, which is a policy that will help you to maintain any regular payments if you are unable to work – maybe because you are ill, you’ve suffered an accident, or you have been made redundant.

You might be in need of short term protection insurance. This is a solution which provides short term insurance cover that can help you to pay for any essential outgoings if you are unable to work for any reason.