Mutual Fund Investment
Mutual Fund is a mechanism that collects money from a large number of investors who have a common investment objective. Mutual Fund managed by a professional fund manager. Each investor can invest their money in equities, bond markets and money market instruments.
After investing every investor will get a number of units, which represents their holding in particular schemes. The income which will be generated by a professional fund manager will be distributed proportionately among the investors after deducting certain expenses.
It is suitable for a common man who wants to invest in a diversified and professionally managed business at a very low cost. A mutual fund portfolio planned and maintained to complete the objectives in future.
Mutual Fund charged annual fees which called the expense ratio, upfront commission, trail commission from the investors. Mutual Fund investors do not have any voting rights. Price of Mutual fund called as Net Asset Value (NAV).
Why You Invest in Mutual Funds?
Investment in Mutual Fund is an easy and paperless process. An investor can check the market and invest in funds as per their requirements. If you are not happy with your current mutual funds then you can switch your funds and rebalance your funds and you can achieve your goals with your regular investment.
Benefits of Mutual Funds
Low Investment
you can diversify your mutual funds by investing by systematic investment plan (SIP) or lump sum. However, When you invest lump sum investment then you will get always less return in comparison of Systematic investment plan (SIP). So always try to invest through SIP and whenever market will go down then you can do lump sum investment in current mutual funds so that you will get the benefit of the volatility of the market and your fund Net Asset Value (NAV) will be low and your return will be higher in the longer time frame.
Taxation
If you invest in mutual funds then you will also get a tax deduction in Section 80C on some of the product like Equity Linked Saving Scheme (ELSS). It is a popular tax saving option in the last few years due to higher returns and due to the locking period of three years.
Money Management
In the mutual fund industry, there is a Professional fund manager team available in each fund house so protection of public money is more so people are interested more in the last few years. They never invest in a blind way like a new investor, they have their own asset allocation strategy as well as their research in each fund. So that they can manage a good amount of public money in an easy manner and they get success and help to generate a good profit on a longer time horizon.
How to Invest in Mutual Fund
Systematic Investment Plan (SIP)
Well, All we known SYSTEMATIC INVESTMENT PLAN SYSTEM. The main motive of SIP is to earn a maximize return that wise most of the people should start in SIP. Mainly SIP provides us with an average rate of compound interest i.e 12 to 18%. Where our bank provides us 6 to 8% interest in FDs this is the maximum rate of a banker. we all are aware that the SIP is subject to market risk, but the main focus of SIP is “First Save and spend next”. We can invest here a minimum of Rs 500/- and more than its weekly, monthly or quarterly according to client needed. In this day, most of the people want to try reduces their own risks. It’s the main reason to here, most of the people chose SIP. The fundamental of SIP would bring in discipline, which has to help us to make logical decisions instead of succumbing to greedy impulses. SIP market is to grow as well as subject to market risk. We have to invest regularly or lump-sum amount in SIP. All we start investing with small of Rupees and reap will give you big returns. This is a simple convenient way to track investments. SIPs are the most proper way to invest in Mutual Fund schemes, which is subject to market risk.
Advantage of Systematic Investment Plan (SIP)
Most of the advantages here like rupee cost averaging, power of compounding, 2x higher returns than FD, RD & SB., Invest as per the future planning, set the low cash cutting in future, So every person should start investment in SIP Mutual Fund and manage their portfolio for long term. It’s really a good way to reduce the risk and set to the goal. But all we aware that some might be little risk in SIPs.These are the disadvantages of SIP still remains an attractive investment avenue for an investor. Because of Its gives good profits, is comparatively less risky and can be important to meet one’s investment goals. Market drooped.
Disadvantage of Systematic Investment Plan (SIP)
Fixed of Time Period, Exit from the limit time period, Sometimes never wait for time, Its calculating average price, No Flexibility for SIP Amt., Not suitable for investors who have irregular cash flows, Cancelling problems facing always. date are limited, wait for global market time to lump-sum investments might be better.
Finally, we have to come out the scenario of SIP is just a way where people have tried to safe investment. Moreover, SIPs always will give a good rate of returns as over a long time investment period. The most important part is a good time. Its never became in human being life, so all we should start investment according to the respective future plan set goal.
Lump-Sum Investment
Lump-Sum Investment is meant One-time investment. Whenever you invest in mutual fund always use Systematic Investment Plan but if you choose Lump Sum Investment then you will get always lower return in comparison of Systematic Investment Plan. If you choose Lump Sum Investment then you will not get the benefit of market volatility so always invest through SIP is best to achieve your goal on a longer period of time.
Why invest in Mutual Funds?
Investment in a mutual fund will help you to achieve your goal in longer period so whenever you start your investment do not forget to contact your financial Advisor for a better selection of instrument and for your better goal planning.
Goal Planning
It is a way to the happiness of life. Everyone should set their own goal because setting of a goal is a very good thought for a future to achieve of destination, objective, focus on aims as well as a desire and reduce to fear. The way to achieve a dream in a human being life the word Goal play a significant role, but we always miss it due to understating communication skill about our future and miss it. It should recall to me later in life after a long time. That time, our time is passing away. And we have no option to say forgive us. Therefore, I must say to every human being is to be please set your goal that the fixed they are on goal to develop your humanity, culture, as well be stronger in future. I say to everyone to love your goal. It should be useful for personal development subject. However, it doesn’t mean that goal setting is always be perfect or that it doesn’t come with any disadvantages. However, we strongly believe in the setting of Goal. It should help us to filter off things that are unimportant to us. This is a way to see a lot of dream idea to convert into a good opportunity in life and the best point is to be its such have built a powerful tool in our brain to breakdown any problems.
Advantage of Goal Planning
- Key of Success
- Sense of life
- Establish standards
- Clear of focus
- Motivational life
- Effective use of time
- Peace of mind
- Easier Measurement of life
- Future forward
- Control of future
- Easy to learn
- Reducing stress
- Good direction
Disadvantage of Goal Planning
- Stress and pressure
- Mental Wellbeing
- Blinded you with other opportunities
- Become result-focused rather than progress focused
- Make addictive
Finally, I Advised to everyone end of the result or achievement in which be effort is directed, is a goal. In a human, we all should to see the dream and try to full fill it. For this, we must a goal and set it in life.
Without a set of goal, we all have dreamless human in the world. So, I am a dreamer, therefore I always set our smart goal to achieve the goal A smart goal is a goal is motivated to achieve. So, My goal is my dreams to set on fire by that first step to take it to make life dreams a reality.
Types of Mutual Fund as per Asset Class
- Equity Funds
- Debt Funds
- Index Funds
- Balanced Funds
- Income Funds
- Money Market Funds
Types of Mutual Fund Based on Structure
- Open-Ended Funds
- Close Ended Funds
- Hybrid Fund
Types of Mutual Fund Based on Investment Goals
- Growth Fund
- Liquid Fund
- Income Fund
- Tax Saving Fund
- Aggressive Growth Fund
- Maturity Fund
- Pension Fund
Types of Mutual Fund Based on Risk
- Very Low-Risk Funds
- Low-Risk Funds
- High-Risk Funds
Types of Mutual Fund Based on Specialized
- Sector Funds
- Index Funds
- Exchange Traded Fund
- Emergency Market Funds
- International Funds
- Global Funds
- Real Estate Fund
- Commodity Fund
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