MUTUAL FUNDS
Everyone should understand the concept of savings, investments and returns. But most of our people don’t have an idea about best investment options. Still some people are struggling to park their investments to generate wealth are because of lack of awareness & fear of loss. But just remember, if you don’t take risks in your life, we can’t move to next level.
Do you want to achieve your financial goals from young age?
Then you have the best option to achieve these things in your life.
Yes… The answer is Mutual funds.
What is Mutual Funds
For many people the word ‘Mutual funds’ seems to be more complicated. But in fact if you understand it, it will be one of the best choices for your financial life. Mutual Fund is a company that collects money from people like us & makes a money pool. Every Mutual Funds are managed by Fund manager. This Fund Manager uses this money to invest in stocks, bonds & other assets. So your money begins to grow.
Why people should invest in Mutual Funds
Most of the investors choose Mutual Funds because they have more & more benefits.
- Diversification
The famous Investor & one of the richest men in the world Warren Buffett said, ‘Don’t put all eggs in one basket’. The main advantage here is investors can split their money & invest in different kinds of funds. This is called Diversification. It helps to lower the risk of an investor, if company falls down.
- Affordability
Most of the mutual fund companies offer low price funds for an investment. You can pick funds even if you have a small budget.
- Expert Management
If you are investing in the Stock Market then you have to do research about the companies, stocks and so on. But in Mutual Funds there is a Fund manager who will do research about stocks, bonds & securities and invest your money in proper places. This makes your work more easy.
- Liquidity
Investors can withdraw or redeem their funds at any time.
- Get High Returns
Mutual funds have various sets of funds which has categorized as high return, tax saving, top companies fund & so on. If you invest for the long term you can get as high returns as possible.
- Tax Benefits
Investors can enjoy the tax benefits or tax Deductions when they choose right investment plans like Equity Linked Saving Scheme(ELSS) funds.
Types of Mutual Funds
Mutual funds are classified as following categories.
- Equity Funds
- Debt Funds
- Hybrid Funds
- Solution Oriented Funds
- Other Funds
Here Fund managers invest our money in top reputed companies, shares, bonds & other assets which has given high returns. Basically these funds generate better returns than term deposits & Debt funds. These funds are suitable for long term goals.
Types of Equity Funds
- Large-Cap Funds
- Mid-Cap Funds
- Small-Cap Funds
- Multi-Cap Funds
These funds are considered as low risk funds because investor’s money are invested in government securities, corporate bonds, commercial papers, treasury bills…etc. Generally these funds are not affected by market fluctuations. This is suitable for short term goals.
Hybrid Funds
These funds are a combination of Equity funds & Debt Funds. These funds are considered riskier than debt funds but compared with equity funds its safe.
Solution Oriented Funds
These funds are mostly preferred for Retirement, Marriage, Child education & so on.
Other Funds
Index funds come under this category. The famous investor Warren Buffett frequently recommends these index funds (e.g. Low cost index funds & S&P 500 index funds).
How to invest in Mutual Fund
You can invest in Mutual Funds in the following ways.
1.Online
Visit the respective website, complete the KYC details of what they ask & need to follow the procedures they set.
2.Offline
In this case, investors directly go to a Bank , Asset Management Companies (AMC), complete KYC details & need to follow the procedures they make.
3.Mobile Application
It’s an easy way to invest in Mutual funds investors. Actually this method is mostly preferable for beginners who have no idea about Mutual funds investments. Many mobile applications are available for investments. Choose the one best application & follow the steps as they provided.
Conclusion
Although more no. of investment options are available in the market, still Mutual Funds Investments are extremely popular among that. It is suitable for long term, mid term & short term goals as well. But choosing the right mutual fund is so complicated for beginners. Those people have to approach a finance expert or advisor & ask him to guide them to invest.
Are you Ready to start Investment in Mutual Funds???
