Mutual Funds is the platform generally used by the Investors to invest for the Long-term benefits. Benefits of Mutual Fund are uncountable, also the Investment Platform to achieve set goals. How mutual funds make you rich, In this article you will get all your answers.
The Investor gets the access to small and blue chip stocks just by the minimum investment of ₹ 500 and more.
You are wondering:
What does it mean “Mutual Fund investment is subject to market risk, read the prospectus carefully”.
The Fund manager professionally invests the money in different segments or platform available in the market which is completely subject to market risk, but it doesn’t mean that you are about to phase bed weather.
If you look at the number of investments in Mutual Funds, you must be shocked. “As per recent discloser from Association of Mutual Fund of India – Indian Mutual Fund Industry cross the mild stone of ₹ 21.27 Lakh Crore as on 31 December 2017.
- 1 Works of Mutual Fund Industry
- 2 Mutual Fund Benefits
- 3 How to invest in the Mutual fund in India
Works of Mutual Fund Industry
Mutual Fund Industry work in two phases First, Front Office work for collection and handling the customers, in the front office there is a term called NAV.
The Net asset value reveals the value of the fund which is directly depending upon the fluctuation of the Market.
Second is back office, in this, the Fund Managers work in shares of different sectors and industries for the favor of the customers and keeping the regulation on the table.
Mutual Fund Benefits
Diversified your Money
Mutual fund itself designed to access your invested money into several company or stocks, In the absence of Mutual Fund scheme, you have to invest in separate stock to diversify your portfolio, which might be too expensive.
Many Investor unable to resource or not even make time to buy individual stocks and keep an eye on ups and downs of the share.
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Professional Investor indulges in research and analyses of the company before investing in the particular shares, on the other hand, the Mutual fund is the good substitute for the investor.
Allow Investor to Invest In the Low amount
Mutual Fund also allows you to invest as low as amount according to your convenience. In India, some of the Mutual fund schemes have the minimum investment of ₹ 500.
Mutual Fund gateways
The mutual fund consists of several gateways through which you can enter the market, Gateways consist of several types of Stock funds, Index funds, Sector funds, Equity Funds, Debt Funds many more.
These kinds of funds allow you to invest in active portfolio or consistence portfolio.
Systematic Investment and withdraw
Mutual Fund also provides the facility of Systematic Investment and withdraw to the investor, this is one of the important Mutual Fund Benefits to the investor.
You can use this benefit just by providing standing instruction to the Bank to deduct the said amount say $1000 from your account on the particular date and invest in the Mutual fund.
Also Read: What is Dividend Adjusted PEG Ratio
Mutual Funds are fully transparent in full ways, the investor can easily watch the value of the fund in the form of NAV and also the bunch of stock which make the fund.
Mutual Funds company is decided to move out, The Board of Directors appoint another investment advisor to handle the fund available with them, or they return of money of the investor with the same amount of ratio invested by you.
If you have invested your money for 12 months or more and you get a good return, it will be treated as Capital gain, Hence No tax is levied on it.
But if you redeem your investment within 12 months, it should be Taxable.
Types of mutual funds
Mutual Funds plays in several segments of categories for a different group of Company with different level of Risk and returns.
- Money Market Funds
- Equity Funds
- Income Funds
- Bonds Funds
- Balance Fund
- Debt Funds
- Gold Fund
- Small Cap
- Large Cap
How to invest in the Mutual fund in India
Investing in the Mutual fund in India is very profitable and provides the investor a huge return in future. The Mode of investment is designed as per comfort level of the investor.
You can purchase the Mutual fund in Lumpsum mode, SIP mode, on monthly daily quarterly, halfyearly basis.
The salaried person received salary on dated 1st to 7th day of every month. For the salaried, the best time to invest in the mutual fund is between 1st to 7th.
All the companies provide online mutual fund portal for invest directly in the mutual fund, Price of the mutual fund is revealed in the form of NAV (Net Asset Value).
The main objectives of mutual funds make people wealthy and to get the dream come true.
Mutual fund ratings available in the market provides the investor a ranking of the fund with their performance and trust of the people.
Also Read: What is Operating Profit Margin Ratio?
Almost every mutual Fund company is investing in a sector-wise fund which includes companies of the same sector and also in some funds, there is a mixture of funds, which provides a great return to their investor.
There are 100 Fund houses available in India consist of tons of categories with tons of Schemes. for more information please refer https://www.mutualfundindia.com/
There are several Fund houses with their scheme provides the investor with a minimum amount of investment with ₹ 500 per months as SIP (Systematic Investment Plan)
I say it “SMALL IS POWERFULL”, If you invest for 20 years every month without fail, with a certain interest return the result is incredible.
How do mutual funds work step by step:
You can clearly see the difference in the amount invested and the return optimize, that’s the magic of Mutual Fund.
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- Hey, Amit Kumar Bansal, the man behind this blog. I always passionate about Taxes, Stock Market. This was one of the reasons why I have chosen the field of account. Blogging was not the coincidence it was a proper decision. The main aim of this blog is to help readers to take an informed financial decision. If you like my efforts kindly subscribe to this blog and also let your friends know about this website by sharing.