Many look to invest in mutual funds but they take a back step because of lack of knowledge, negligence, fear of failure, etc. However, mutual funds are considered one of the best investment options if the above-mentioned issues are addressed properly.
In mutual funds, the money pooled from investors is invested in shares, bonds, securities, etc. The pooling of money and investment is done by the Asset Management Company (AMC). Thus, it is important to see that if the company has a good fund manager as he is the one who takes crucial decisions related to investments.
Here, let us see a few reasons that prove why investing in mutual funds is not a bad idea.
1. Risk and returns
The major concern of investors while investing in mutual funds is a risk. There are many mutual funds in the market where the risk element is very less. For example, in balanced mutual funds, the money is equally invested in equities and government bonds. In case, if the market is down, then your money invested in government bonds will yield guaranteed results. Moreover, the investments are managed by fund managers who have great knowledge of markets.
There are many open-ended mutual fund schemes to chose from where there is no lock-in period. You can have access to money at any time and withdraw money either partially or completely. Flexibility is one such option that makes mutual funds more attractive to the customers.
3. Can invest a minimum amount
A minimum sum of Rs 500 is enough to invest in mutual funds. The minimum sum can be increased further as and when there is a possibility. Thus, it is better to start early by investing a small sum to earn good returns in the long run.
4. Achieve your dreams by investing in mutual funds
Everyone has his/her own dreams. It could be either buying a vehicle or buying a property. He/she can achieve dreams by investing in mutual funds. There are short term and long term mutual funds available in the market, and an investment should be made taking into account the time needed to fulfil the dream.
Patience and financial discipline are the key to earn good returns in mutual funds.