5 Things You Need to Know- Mutual Fund Investment

best investment plans Mutual fund investment plans are best for those who wish to grow their money or meet certain financial goals in life. Having fair understanding about Mutual Funds is important, especially when you are planning to invest in near future. With countless myths lingering around, it often becomes hard to find investment plans that work best for you. Below given are 5 major things that you should know before choosing an investment plan:


Investment can be only made with large amount of money

This is one of the most common myths about Mutual fund investment. Fact is, you can start investment with as little as Rs 500 per month. This form of investment comes under SIP (Systematic Investment Plan). Investor can earn sizable returns even by investing in small amounts at interest of upto 15%. In order to build huge corpus, all you need is to undertake and follow a disciplined investment approach.


In-depth knowledge about investment is must

Are you avoiding or overlooking any chance to invest, just because you don’t have much idea about the Mutual fund investment industry? Good news is you don’t have to be a Financial Expert to make an investment. Mutual Funds are listed among the most simplified ways to grow money and sax tax. The investment made by you is managed by professionals; it entirely depends on investor whether to buy or sell bought units. However, a professional mutual fund advisor can do the research and risk analysis and suggest schemes that are best for you.

Five-star rated investments are best to go with

When it comes to Mutual fund investment schemes, five-star rating does not make much sense. As the flow of the stock market is volatile, it can significantly impact the value and growth of your money. Where Stock market trend is pretty unpredictable, market research and tracking can be helpful in making the next big move regarding purchase or redemption of the units. Rating for different Mutual fund investment plans can fall or rise over time based on risk-adjusted performance of the investment plan against volatile stock market.

Mutual funds means putting money in equities 

Equities are shares issued by companies that are mostly governed by market rules. Investors with limited or knowledge about investment industry assume Mutual funds to solely invest in equities. You would be surprised to know that more than 60% assets of Mutual fund investment industry are debt mutual funds, while equities comprise not more than 35%. Equities serve as good option for those who are ready to take risks for better tax treatment and higher returns. Investing in debt mutual funds means lesser risk and limited growth. One can not only invest in debt or equity, but also choose to invest in gold.

It is SAFE to invest in SIP

Investors who wish to invest in small amount can go for Systematic investment plans (SIPs). SIPs come with less risk, offering investors close to high returns as equities. Many investors believe SIPs to be risk-proof, which is not true. Market trends, be it high or low impact SIPs like any other Mutual fund investment. Therefore it is important that you keep risk capacity in mind along with return expectations while planning to invest in SIP.

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