Why should one invest in Mutual Funds?
One should never invest in Mutual Funds, but should invest through them.
To elaborate, we invest in various investment avenues based on our requirements, e.g. for capital growth - we invest in equity shares, for safety of capital and regular income - we buy fixed income products.
The concern for most investors is: how to know which instruments are best for them? One may not have enough abilities, time or interest to conduct the research
To manage investments, one can outsource certain tasks one is unable to do. Anyone can outsource ‘managing one’s investments’ to a professional firm – the Mutual Fund company. Mutual Funds offer various avenues to fulfill different objectives, which investors can choose from based on one’s unique situation and objective.
Mutual Fund companies manage all administrative activities including paperwork. They also facilitate accounting and reporting the progress of the investment portfolios through a combination of Net Asset Values (NAVs) and the account statements.
Mutual Fund is a great convenience for those who need to invest their money for future requirements. A team of professionals manages the money and the investors can enjoy the fruits of this expertise without getting involved in the mundane tasks.
A plan for every goal
Yes, Mutual Funds are ideal to help you plan your life goals!
· Mr. Rajput eventually wants to move away from the city, into a farmhouse on a hill station when he plans to retire after 15-20 years.
· Mrs. Patel didn’t receive any retirement benefits. Although she has savings, she now needs a regular income from her investments to meet her regular expenses.
· Mrs. Sharma has surplus money generated from her business and lets it lie idle in her bank account. She is required to pay her suppliers and staff only after a few days.
The above could be real life situations. Is there any option available for these investors?
YES! Mutual Funds!
Mutual Funds offer different kinds of schemes for different kinds of investment objectives. For e.g.
- Long term goals like building a corpus for retirement – You could consider equity and balanced funds
- Looking to generate income with relatively low risk – You could consider a bond fund
- Park your surplus money till you decide where to invest it next – You could consider a liquid fund
Mutual Funds offer different kinds of investment options for planning one’s investments, especially when one is clear about their goals.
₹ 500 se toh sirf shuruwaat hai
You can start investing in Mutual Funds with just ₹ 500 a month!
People feel that to earn meaningful returns, large sums must be invested in Mutual Funds. Well, you can start by investing as little as ₹ 500 per month and gradually increase your investment as your income rises.
Check out the table below to understand how your investments can grow at different rate of returns.
*This is strictly as an example. The returns shown in the table are purely hypothetical and for illustration purpose only. Mutual Funds do not offer any assured rate of return.
Mutual Funds are meant for everyone from the Aam Aadmi to the Bada Aadmi (a common man to high net worth individual). There are three mantras to help the small saver aim for a larger goal:
a. Start early - even with a small amount
b. Invest regularly - no matter how small the amount
c. Stay invested for a long term - to give your investments the opportunity to grow
Mutual Funds have evolved to suit every kind of investor over time. Even if the investment amount is low, regular investments and a disciplined approach can help you build a large corpus over time.