Investments are considered to be one of the most potent tools of wealth creation but it only works effectively when you choose the right mix of schemes for your investment portfolio. Most investors tend to judge an investment plan on the basis of its cost and tend to overlook the more important factors involved. The direct plan mutual fund is a similar plan that comes at a cheaper cost than the regular mutual fund but requires a thorough knowledge and in-depth analysis of the market.In adirect plan the investor purchasesa mutual fund scheme directly from an authorised branch or online. This allows them to save the commission or service charge.

Why guidance matters over cost?

Though direct plans tend to offer better returns when compared to most regular plans, the investors tend to overlook the most important aspect of investing in such schemes. When you look at the bigger picture, you will find out that earning a higher rate of returns is only possible when an investor has proper guidance and thorough knowledge about the investment market.

These following highlights why guidance is more important than the cost:

• The terms, criteria and suitability of each plan are crucial for its fruitfulness in terms of returns and risk blanket. When the investors avail a regular mutual fund, they also avail the service of investment managers who educate them about the crucial aspects of investment.
• The investors often don’t realise that most financial advisors don’t offer an unbiased and genuine opinion while selecting an investment scheme. Direct plans allow them to save in terms of cost by denying them the genuine professional advice that the regular investors avail of through their investment.
• Ignorance and biased advice will always hinder the growth of an investor. Don’t get carried away solely on the basis of cost and consider a more refined and guided investment plan to benefit in the long run.
• The guidance and knowledge that the regular mutual fund investors avail from professional fund managers, act as a cushion against loss and risks that usually arise due to market ignorance.
• A direct plan mutual fund investor, usually turn to people with limited expertise for investment advice or satisfy themselves with the biased and half-baked guidance of the branch assistants. Don’t gamble your hard-earned money on the basis of partial knowledge or sugar-coated advice.
• The regular mutual fund investors are more confident, well-informed and focused in terms of market knowledge and investments. The chance of meeting heavy losses or setbacks is comparatively lower in case of the regular fund investors than the direct plan investors.
• Though regular mutual plan may initially cost more due to service commission, in the long run, they will reap benefits by not losing a chunk of their money due to sheer ignorance or lack of guidance.

Proper guidance and thorough knowledge will help you to earn steady returns and build a corpus. Invest in a suitable regular mutual fund to avail the best of both. Consult our professional fund advisors for planning your investments properly.