A broadly held but ambiguous belief is known as a 'myth'. Myths tend to create a certain kind of notion about the subject which further conditions the way people look at it and interpret it.
In the same way, there are many myths about Mutual Fund investments as well. In order to have an excellent experience with investing money, accomplish financial objectives, and make money over time, investors must have the option to bust these myths that go around in the mutual fund market.
Going headfirst into investing in mutual funds is not a good idea since the volatility of the market might not be good for your investments. You need to thoroughly clear away all the biases that come with mutual funds — all the misunderstanding that run around it.
Here we will look at the five popular myths that revolve around mutual funds.
This is not true! There is so much that is heard around investments — that it takes a lot of funding to invest. Many investors likewise feel that to have the option to save more money over time, they need to pour in enormous sums of money. However, the truth of the matter is that to invest in a Mutual Fund, one can start with a disciplined Systematic Investment Plan (SIP) investments, with investments generally starting as low as Rs. 500 for Equity Linked Savings Scheme and Rs. 1000 for other investments.
As time passes by, investors can expand the measure of their investment and diversify their portfolio. For example, if your annual rate of interest stands at 12%, then even a modest sum of Rs. Two thousand a month can develop to Rs. 20 lakh in 20 years. Besides this, SIP plans additionally develops and inculcates a sense of discipline in you. The Equity-linked Savings Scheme (ELSS) locks the investment for a long time, which encourages the money to grow without it being influenced by the unpredictability and volatility of the market.
No, this is not really true! One of the popular and true sayings that go with mutual funds is that the past performance of a fund might not continue. This is a sort of disclaimer which applies to funds that have been performing well for some time. The understanding that mutual funds can underperform and overperform with time — depending on the market should be taken into consideration when you invest in a mutual fund scheme. Analyzing all the funds will give you a better knowledge. One of the best ways is to track the performance of a fund over time and invest in it.
No, we can bust this myth as well! An investor invests in Mutual Funds because he has specific objectives to accomplish. These objectives could be applicable for the long term or even last for a shorter period. The selection of a fund depends on how they wish to accomplish their financial objectives. Debt funds and equity funds come with their own set of qualities. Now and again, investors like to go with both and come up with a 'Balanced Fund' or 'Dynamic Fund' that offers the benefit of getting well with the market conditions. In this manner, the idea of one of these plans being better than the other is not entirely accurate. It depends on the need and requirements of the person who is investing in these plans.
Not at all! To know about Mutual Funds can generally be a bit of leeway, but having practically no information isn't an obstacle in making investments. Despite what might be expected, Mutual funds are for people who need to save money over time and accomplish their financial objectives and goals, as their investments are overseen by experienced and capable analysts and fund managers. If an investor needs to find out about investing in a specific Mutual Fund plan or its presentation, then there are several investment counselors or financial guides who can help with the decision process.
No, this is not true! Mutual Funds encourage an investor to understand their financial dreams and save money over time, say for a dream vacation, or their retirement years. Investors invest a reasonable sum of their pay or reserve funds into a specific Mutual Fund plot which in the long haul is expected to produce fruitful returns.
The thought that investing in Mutual Funds can make somebody rich is inaccurate and may often lead to incorrect and misleading decisions. Mutual Fund investments are liable to market risks. They, however, do offer the capability of making money, but it requires careful planning and strategizing — something which mutual funds on Finserv MARKETS offer. However, patience and discipline are two factors that can take you a long way when it comes to investing in mutual funds.
Now that you know what is true and what is a myth, you can go on and move forward on your investment journey. Remember that a safe and disciplined approach is much better than hogging risk, as it is highly unlikely that taking a lot of risks will always take you a long way.
Mutual funds on Finserv MARKETS are one of the best options for people who do not have the expertise or the time to focus and invest in the market. Top-rated mutual funds are run by professional managers who pick different instruments to invest in. There are no commission and hidden charges, and opening an account is easy and hassle-free, and can be done with a few clicks — all you need to do is provide a few documents to complete the basic KYC process and you will be good to go. On Finserv MARKETS, you also get a detailed insight into your portfolio so that you know how your funds have been performing. With access to exclusive offers, you get access to personalized financing — a process which has never been so easy.