By Ashish Kyal –
A mutual fund is professionally organized fund which collects money from the public and then invest this corpus in those instrument for which it has raise fund. There are many types of mutual fund available where 2 most popular are Debt mutual fund and Equity mutual fund.
Debt mutual funds are considered low in risk and invest in instruments which yield a fixed income. Example for the same can be government bonds, commercial paper, company fixed deposit, etc. On the other hand, Equity mutual fund is an essential asset class for the long-term growth of saving with returns that beat inflation. Equity fund typically invest in stocks of companies and have provided inflation beating return over the long term.
So, one should invest in Debt fund or Equity fund? Confused?
The right answer may be both. Basically there are two different mindset, which shape our lives. Mindset can be ‘Fixed Mindset’ or Growth Mindset’. As seen fixed mindset are found in people who have ability and intelligence. They try something and succeed at it without much effort. And they regress, themselves with what they gets. This means they have more preference for debt fund with a fixed return. On the other hand those who succeed on hard work and dedication have a Growth mindset. The efforts and hard word brings success for them. Growth mindset people have a lot preference towards Equity funds as they do not regress with limited returns.
In a way, fixed and growth mindset have a parallel with the words meaning investment. But if you get a person a fixed mindset person to invest in equity, the risk and stress will make the person run away sooner. Whereas, a growth mindset person consider all debt fund to be a waste of time or money.
It goes without saying that one needs to balance the two sides of mindset. The one who balances it can make millions out of it.
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