Many investor wants to invest but don’t know how to do it. Sometime, we don’t posses knowledge set but maintain huge bank balance. Mutual fund is one of the way wherein investor don’t need to worry about the portfolio or investment and instead of that fund manager to invest investor money and investor are allowed to invest more as top up or reduce the exposure or can switch from one fund to another fund
Top reasons to invest in mutual fund
1. Good
for Diversification
Mutual
fund offer instant flexibility to investor to own multiple stocks through
Growth or secured or balanced fund based on their appetite. The growth of
equity market gets visible through Net Assets Value which is also known as NAV.
Investor gets the number of unit based on the invested amount divided by the
NAV
2. Good
as Professionally managed
Many
don’t posses knowledge whereas mutual fund managers and analysts invest lots of
time every day and night and dedicating
their professional skills in researching and analysing current and potential
holdings for their mutual fund.
3. Low Cost
The rules and regulations are
governed and controlled by the SEBI (Securities and Exchange Board of India)
and all the expense and cost are fixed on the maximum side by the SEBI which
has to followed by each and every AMC in India
4. Small
Investment is possible
Many
mutual funds allow investor to invest based on their appetite. It also allow
investor to invest more through top ups. Some of the mutual fund also allow exits
which is nothing but ready liquidity.
5. Safe
Investment
The strategy of investment in mutual
fund is mostly low risk investment.
Why
investment in Mutual Fund is not so much popular
1.
Investors
are not used to open-ended investment products. When we tell them that they can
begin with an investment of Rs 5,000 in a fund, keep adding amounts as per
their convenience, and draw as needed, they do not believe this.
2.
Investors do not care much about unrealised return. We can go
to town talking about how Rs 10,000 invested over 20 years became Rs 1.50 lakh.
The truth is that very few actually invested this much money so many years ago.
3.
Many
investors think that mutual funds invest in stock markets, and stock market
means reckless speculation.
4.
Those who warm up to the idea of investing in mutual funds
don't know which product to choose.
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