Growing money here means the return that we get on our investment. With numerous options available, from traditional savings accounts to volatile fixed deposits, we got a lot of options in the market to earn a pretty good interest. Right?
But what if I say that there is one investment method that provides us higher return of interest on our investment than other investments.
Here is where MUTUAL FUNDS come in.
So, what is a mutual fund?
Mutual funds refers to a collective investment scheme where funds from multiple investors are pooled together to invest in a diversified portfolio of securities. Managed by professionals and expert fund managers, it offers a blend of stocks, bonds, or other assets, catering to varying risk appetites and investment goals.
Now here is the question, why are mutual funds better than other investments?
The thing that makes mutual funds better is the power of diversification.
As said earlier it pools the money and diversifies it into different securities that lower the risk up to a certain margin. Also diversifying the portfolio gives us the opportunity of better returns. Investment in different securities secures our money from uncertain dip or losses.
Also mutual funds are also customizable and of low costs. We got a mutual fund scheme for every possible investment objective. We can invest in mutual funds from a starting money of 500 to 1 lakh depending on our capacity.
Now the question arises how to invest in a mutual fund account.
Mutual fund investment is straightforward and can be tailored in different ways. Mutual funds can be opened through different ways such as through bank and NFCs, mutual fund distributor or through apps also.
To invest in a mutual fund you have to first understand your expenditure and earning pattern.
After analysing it you have to:
Set your financial goals: You have to determine why you are investing. It can be for retirement, child education or buying a home. You have to set your financial goals that define your needs.
Research and select funds: A lot of mutual funds are available in the market that caters your needs. You have to select which investment plan is suitable for you. For this you have to first identify your risk profile and then on the basis of your profile you can select your funds.
Open an investment account: Opening an account can be done online and offline both. To open an account you must undergo different process which starts with completing your KYC.
Allocation and Diversification: Mutual funds are for diversification. Instead of putting all your money in one asset you can diversify your investments in different assets such as bonds, equity or debentures.
Monitor: Monitoring your funds is very important as it gives you an idea on the performance of your mutual fund. Returns can fluctuate according to the market fluctuations so you have to keep an eye on it and have to rebalance to get the desired return.
Sometimes even this process can be cumbersome for some people and here one person plays an important role and i.e mutual fund advisor. You can also open your mutual fund account with the help of a mutual fund advisor, they will not only help you in opening an account but will also provide you the best suited mutual fund that matches and fulfils your demands.
Bottom Line:
In today’s economic landscape, where financial stability and growth are paramount, mutual funds emerge as a dependable investment avenue. By offering diversification, professional management, and accessibility, they cater to a wide range of investors who are seeking to build wealth over the long term as well as short term.
Whether you’re saving for retirement, education, or other life goals, mutual funds provide the tools to achieve financial success with prudence and foresight.
