Money, unless invested, doesn’t increase. It has to get invested in order to gain returns and accumulate value over time. This also is a long term solution to generating wealth. A popular investment option to achieve high yields with minimum risks is mutual funds.
Mutual funds offer investors the choice to diversify their portfolio through multiple channels of investment through the ownership of individual bonds and stocks. It is also one of the most risk-free ways to multiply your savings as it is managed by professional fund managers who use the pooled money to earn the highest possible returns. It is a great way to achieve your long term goals and make sure that the savings you have do not remain stagnant, but keep growing.
The Securities and Exchange Board regulates mutual funds on India, which makes sure that your investments are under strict scrutiny, and that your interests are well-protected.
If you haven’t already thought of investing in mutual funds, even starting small, then here are some of the reasons why you should start considering it.
With all the numbers crunching around, you might find it a tad bit confusing to operate your expenses. With mutual funds comes a sense of relief. They are managed by professional fund managers who have an eye on the market all the time. They are good with identifying the right stocks to go after, and even better at knowing when to sell them. A large part of their job is spending hours trying to analyze the market, interpret the trends, and making sure that you are getting high returns on the investment.
In other words, you take the command of earning, while the fund manager takes charge of steering your funds.
With a systematic investment plan in a mutual fund comes a discipline of saving. You will be allocating a certain amount of money to the fund. You can increase or decrease this amount based on your income and how your mutual funds are performing. The amount that you have to set aside to start investing in mutual funds is quite nominal — it can start with as low as Rs 500. There is hardly any burden on your shoulder.
The fact that you can track your investments makes the whole process entirely transparent, so you know exactly where your money is going and how well are your funds performing in the market. While the benefits of saving now might not show up now, they are a boon when time passes, and you look forward to retiring. You also have the option to put the investment date right after your salary to ensure that you do not spend the money which you originally intended to invest.
The money that you invest in mutual funds is compounded, which means that you will be earning not only on the money you are depositing but also on the interest it has already generated. This means that the longer your money is invested in, the better the returns come to be. For example, Rs 500 invested every month for a long time could turn out to be a significant corpus in due time. Compound interest is also called the snowball effect, as it gains volumes on the roll with passing years.
Almost all the traditional modes of investment come with a specific lock-in period. Lock-in period is a time given to your income to generate interest — a period where you cannot access the money. In case you wish to withdraw your money before the maturity period, you might draw a penalty. Mutual funds often come with less or no lock-in period, which gives you the flexibility to redeem your money whenever you want. Unlike other traditional modes of investment, there is no hassle of having a locking period. However, it is recommended that you let your investment continue until you reach your financial goal to make the most out of your investment. Besides, that also makes for the discipline of investing as well.
Diversity is essential to guarantee maximum returns on your portfolio, like not putting all the eggs in the same basket — an effective measure to reduce risks. With mutual funds, you get the power of diversification; you get to invest in various stocks. Not all stocks perform well all the time in the market, so your fund manager makes sure that your money varies across a range of funds so that your investments never go stale and you continuously keep on accumulating interest on them. You funds are exposed to various industries, asset classes, sectors, and market capitalization.
This, perhaps, is one of the best features of investing through mutual funds. Mutual funds are offered through various market players, such as Finserv MARKETS, where you can start investing with zero percent commission. Starting a SIP is like the walk in the park, and can generally be done through websites and mobile apps in a few clicks. These investments are on autopilot mode, and you hardly have to do anything — the fund managers take care of it all. The money is automatically debited from your account every month, so you can be assured that you will be getting maximum returns on your investments with minimum effort.
Mutual fund schemes on Finserv MARKETS have grown to be a popular option for investing in mutual funds. You get access to free and fast account opening feature — all in a matter of few clicks. You need to create an account, choose your fund, provide the investment amount, submit you basic documents for the KYC process. and complete the payment. You also get access to your detailed portfolio so that you can keep track of your investments at regular intervals. Depending on your investment goals and risk profile, you get access to personalized financial planning — a smooth and hassle-free method for growing your savings.