Mutual Funds are the investments which are done by an individual or an organization for the investment purpose in order to purchase certain policies or securities. Mutual Funds can be done widely in retail or institutional areas. The initial procedures include collecting a large sum of money from different investors and then collecting it for the investment in the share of stocks of a company. All of the shares are later calculated and managed by a team of professionals whose only goal is to earn the maximum profits. They even provide services like cheque writing and an instant withdrawal. The sequential optimization with them creates transparency with the findings which ultimately maintains a comparison level.
They have several advantages in order to dilute the benefits. The overall investments and advantages or disadvantages are actually managed by a fund manager. We might have been heard many times that ‘Mutual Funds Sahi Hai’ from our friends or relatives. It is the highly growing investment sector which is gaining enough attention in every segment. The entire investment in mutual funds is done and executed after calculating all the risks that might be at the negative end.
Actual advantages of mutual funds
Many of the organizational structures promise you certain things but when it comes to Mutual Funds things automatically gets converted. Mutual funds are totally reliable and beneficial in several ways. With the increase the diversification, many of the security issues are sorted. Many of the high and services got to the floor reducing the risks. There are many exceptional advantages to this investment method. The reasons why it is concluded that ‘Mutual Funds Sahi Hai’ are –
- They provide a higher amount of returns as compared to the bank deposits.
- All of the mutual funds and accounting are managed by experienced and professional individuals.
- Don’t occupy much time as you can easily withdraw your amount as per your requirement.
- There are 7+ crores of Indian investors with Mutual Fund.
- The growth rate increases consistently benefiting you in every aspect.
Types of mutual funds
As we have clearly dived deep into the investments in mutual funds let us also know the types of it. The most widely and presumptuous Mutual Funds are –
- Money market funds – For the Government Bonds, bank acceptances, commercial paper or treasury bills offering short-term and fixed income investments they are considered best. It is basically a reliable investment method but it also has a low potential for the return.
- Fixed income fund – In this type of funding the invested amount is paid at a fixed rate like corporate bonds, Government Bonds or grade corporate bonds. This funding is generalized in order to get the regular amount of money into the account and with maximum yielding. These funds actually hold the government or commercial bonds.
- Equity funds – Investment done in these funds is basically in stock. With the marketed or fixed funds, entire calculations are targeted to achieve a higher amount of profit rate. The risk of losing all of the money increases much in this type of fund. Hence, until you are sure with the organization or investing company don’t encourage yourself to put your money into it.
- Balanced funds – These types of funds are a balanced blend of equities and fixed bonds. The case of achieving maximum profit rates with less or almost null loss is aimed at this fund. This platform equally divides the gained amount of income funds and reduces the risk with equity funds. On one hand, conservative funds include less equity related to bonds and on the other hand, aggressive funds include more equities and fewer bonds.
- Index funds – In these type of funds, a specific segment is tracked all along to know the record. The index value actually depends upon the mutual funds. As one will go up or down, the other one will suffer much.
Initiatives to be taken
Well, the grass is not always greener on the other side. Mutual Funds provide enormous security as all of the further consequences are already arranged by an expert team. All you have to do by yourself is get into the habit of investing first. These funds don’t ask for a large sum of money instead you can invest by adding even the smallest amount.
If you are willing to save money for your daughter’s marriage or for the education of your children as they grow up, you must definitely think about investing through mutual funds. Mutual funds are considered as the best platform for investment in India. All of the capital investment is then pulled into a single organizational structure for making the profits. You can always think about Mutual Funds as they are regulated and administered by a government body thus devoid of any fraud.
Why Mutual Funds over other conventional investing methods?
There are a number of investing methods available but the overall trust lies where extreme liberty is given. Mutual Funds are considered one of the best investment methods and the profit associated with it is generous. Unlike other investing methods like funds and FDs, you don’t have to invest a large amount of money. Instead, Mutual Funds allow you to invest all of the money in parts or in the smallest amount. The other keynotes are
- It is managed by the government organization.
- It supports diversification.
- Expert money management is provided by professionals.
- Totally safe and secure.
Most of the time individuals don’t have the correct idea or courage to make independent investment decisions. Then come the expert advice from the professionals who have had enough experience with investments and funding. In the long run of investment and profits, Mutual Funds will help you enough.
The other major important advantage of mutual funds is that it is managed by a professional team and well regulated by SEBI. It stands for Securities Exchange Board of India hence you can totally trust mutual funds. Even the investment experts have agreed for mutual funds by certifying them as ‘Mutual Funds Sahi Hai’. After a certain period of time, you receive much more than the initial investment. Profit rates in mutual funds are quite higher than the usual.