How mutual funds are relatively stable investment option

With so much propaganda and advertisement of the idea “MUTUAL FUNDS SAHI HAI”, let’s analyse this topic in brief and find out why mutual funds are relatively stable investment option.

The following factors can be taken into consideration for analysing mutual funds closely:

  • Diversification- Mutual funds provide diversification across various asset classes and Investment in different asset classes will eventually mitigates the risk and enhances the reward.
  • Low investment threshold- Direct investment in the capital markets can be very expensive for some investors whereas investment in mutual funds can be started with as low as Rs.500 per month.
  • Professionally managed – When you buy a mutual fund, you are also choosing a professional money manager .Mutual funds are managed by fund managers who use good investment strategies and thorough analysis for managing funds.
  • Liquidity- based on the prevailing net asset value mutual fund units can be redeemed anytime when required depending on the type of scheme. Although one needs to check of the EXIT LOAD which some fund houses charge as they redeem their investments
  • Wide variety of choices- Mutual funds provides variety of schemes depending on requirements of the individual barring from child’s education schemes to retirement schemes
  • Transparency- We can map the performance of the funds based on NAV (Net Asset Value) of the fund which is disclosed on every business day as per SEBI rule.

The above given points justifies why one should definitely invest in mutual funds. Overall, there are many reasons why investing in mutual funds makes sense .To select right mutual funds click here

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