There are many options when it comes to investing money - stocks, shares, bonds, money market securities and more. The investment vehicle that you choose depends totally on the kind of risk you are ready to take and the returns that you are expecting.
If you have no idea about how each one of these investment vehicles work, the safest option would be to go for mutual funds.
Many banks and financial institutions offer mutual funds as an investment opportunity for their clients. A Mutual fund is managed by a professional fund manager who invests the money received from investors into diversified securities, selected intelligently and with great expertise.
When compared to the other kinds of investment opportunities, mutual funds offer maximum benefits to the investors. Some of these include:
Inflation-adjusted returns
Mutual fund offers inflation-adjusted returns, without you having to spend any time or efforts on the same. Investing in mutual funds is a much better option when compared to letting your money grow in your bank. This is how it is so:
Let us say you have deposited Rs.1000 in your bank today as savings, which should be good enough to buy 10 pairs of bathroom slippers. At 5% annual interest you should have Rs.1050 in hand by next year this time.
Now consider a situation where there is 10% inflation that year…
Those bathroom slippers now cost Rs.110 instead of Rs.100 each. So, now with Rs.1050, you will only be able to buy 9 pairs of bathroom slippers instead of 10.
In case of a Mutual Fund Investment you don’t have to worry about such a situation. By offering inflation-adjusted returns, the fund managers make sure your hard earned money will not depreciate in value in the coming years.
Expert Management of Funds
There can’t be a Warren Buffet in every investor, which is why there are mutual fund investments. Whenever a bank or a financial institution comes up with a mutual fund scheme, it ensures all the decisions it takes are based on performance and well-researched prospects that are available in the market. There is an experienced fund manager and a dedicated research team behind every mutual fund scheme.
Convenience
If you cannot invest time or efforts in doing research to find out which securities are doing well, when is the right time to buy a particular security or sell and so on, you can conveniently invest in mutual funds. An Investment in mutual funds can be started with just Rs.500. There are no worries about buying or selling them due to fluctuating market conditions. There is an option for everyone, whatever be their needs or goals. If you cannot invest in a lump sum, you can even consider a SIP mutual fund, where you can invest a specified amount of money at regular intervals.
Low-Risk / Higher Returns
Mutual funds distribute your investments across different kinds of assets. The loss in case of one stock will easily be made up by a profit in case of another, thereby reducing your risk. They are aimed at helping you achieve higher returns on your investment.
Increased Liquidity
In case of Mutual funds Investment you can get back your money promptly, whenever you wish. If you have invested in an open-ended mutual fund scheme the money you get back would be based on the current NAV or Net Asset Value. Close-ended schemes can be traded in stock exchange.
Make sure you read all the terms and conditions thoroughly before running that online search on “mutual funds India.” This will help you prepare well and achieve your objectives, without any worries.
If you have no idea about how each one of these investment vehicles work, the safest option would be to go for mutual funds.
Many banks and financial institutions offer mutual funds as an investment opportunity for their clients. A Mutual fund is managed by a professional fund manager who invests the money received from investors into diversified securities, selected intelligently and with great expertise.
When compared to the other kinds of investment opportunities, mutual funds offer maximum benefits to the investors. Some of these include:
Inflation-adjusted returns
Mutual fund offers inflation-adjusted returns, without you having to spend any time or efforts on the same. Investing in mutual funds is a much better option when compared to letting your money grow in your bank. This is how it is so:
Let us say you have deposited Rs.1000 in your bank today as savings, which should be good enough to buy 10 pairs of bathroom slippers. At 5% annual interest you should have Rs.1050 in hand by next year this time.
Now consider a situation where there is 10% inflation that year…
Those bathroom slippers now cost Rs.110 instead of Rs.100 each. So, now with Rs.1050, you will only be able to buy 9 pairs of bathroom slippers instead of 10.
In case of a Mutual Fund Investment you don’t have to worry about such a situation. By offering inflation-adjusted returns, the fund managers make sure your hard earned money will not depreciate in value in the coming years.
Expert Management of Funds
There can’t be a Warren Buffet in every investor, which is why there are mutual fund investments. Whenever a bank or a financial institution comes up with a mutual fund scheme, it ensures all the decisions it takes are based on performance and well-researched prospects that are available in the market. There is an experienced fund manager and a dedicated research team behind every mutual fund scheme.
Convenience
If you cannot invest time or efforts in doing research to find out which securities are doing well, when is the right time to buy a particular security or sell and so on, you can conveniently invest in mutual funds. An Investment in mutual funds can be started with just Rs.500. There are no worries about buying or selling them due to fluctuating market conditions. There is an option for everyone, whatever be their needs or goals. If you cannot invest in a lump sum, you can even consider a SIP mutual fund, where you can invest a specified amount of money at regular intervals.
Low-Risk / Higher Returns
Mutual funds distribute your investments across different kinds of assets. The loss in case of one stock will easily be made up by a profit in case of another, thereby reducing your risk. They are aimed at helping you achieve higher returns on your investment.
Increased Liquidity
In case of Mutual funds Investment you can get back your money promptly, whenever you wish. If you have invested in an open-ended mutual fund scheme the money you get back would be based on the current NAV or Net Asset Value. Close-ended schemes can be traded in stock exchange.
Make sure you read all the terms and conditions thoroughly before running that online search on “mutual funds India.” This will help you prepare well and achieve your objectives, without any worries.
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