HOW TO INVEST IN MUTUAL FUNDS

MUTUAL FUNDS

                    Hello my dear friends, after seeing so many advertisement on Television and YouTube that Mutual funds sahi hai. Then also se are scared about Mutual Funds. Because we don't know about Mutual Funds that what is mutual fund and how it's work and all. And we are mainly scared that if we got a loss in Mutual Funds then what we will do. There are more than 500 schemes available in Mutual Funds.

                    But according to top advisor and my experience, if you choose a very bad schemes also then also for long term i.e 8 to 10 years you will get surely more profit than Fixed deposit. That means if you select a very bad scheme from whole market, then also you will get 8 to 10 % return per year which is greater than Fixed Deposit. And if you selected a Best scheme in Mutual Funds then you can get more than 22% returns per annum also. In worst case, 10% and in best case 25% also you can expect from Market. On an average you can expect 15% return annual from market which is much better than any property, Gold, or any other asset classes.



                    Now if scared is removed from your mind, then now we will talk about What is mutual, What's the concept of that, How it works, How to invest, etc.

WHAT IS MUTUAL FUND ?

                    Most of the people think that, mutual funds investing means investing in share market but it's not like, Through Mutual funds you can invest in gold if you want, you can invest in Real estate if you want, you can also in Debt or Liquity funds if you want or you can also invest in Share market and equity through Mutual Funds.

                    Advantage of Mutual Funds is that we call also invest small amount also. For example :- If you are having 5000 rs and you want to buy a Stock of MRF or Page industries which is above 20000rs per share. What can you do? You cant buy it. Hence, in this situation through Mutual Funds you can invest it. Now through Mutual Funds how will you buy it. Mutual funds will take 1000 rs from 50 people for example i am saying. And now from that 50000 Mutual fund will buy a 2 or 3 shares. Means that 50 people has taken some part of the shares. Now Mutual Funds will give you a Units of 1000 rs to all of them. That's it.

                    Now how this Mutual Funds do all this. First of all this Mutual Funds makes one company which is called as AMC and that company launches one scheme and tell that this is multicap fund where we invest in Large cap fund, midcap fund, small capital fund, etc and we have experts also who will manage your money and this is his track record and all about that scheme. So interested people will invest in that scheme according to their capability like 500, 1000, 2000, 5000, 50000 and so on. And this money will go to AMC which will manage your amount. And that total money will recieve from peoples or investors is called as AUM i.e Asset under management. AMC will hire Experts to manage your funds. You will get a Units of that scheme and whenever you want to exit it you can exit it and in 2 days you will get your money back to your bank account with your return also.

                    Mutual means sharing like that only all are sharing some amount and from total amount of all investors they are buying shares and growing your funds. It's a simple concept of Mutual Funds.

                    In Mutual Funds there are two types of investment :-

I. SIP :- SIP means Systematic investment plan. In short, SIP means you need to invest some amount every month.

II. Lumpsum :- In Lumpsum, you need to invest money at one time.



ADVANTAGES OF MUTUAL FUNDs :-

√ By investing a small amount you will get a exposure in more company and more diversification.

√ Here in Mutual Funds a EXPERTISE is managing your account so you don't need to worry.

√ Here in Mutual Funds, the Expertise will buy and sell shares if he wanted anytime, you don't need to worry about, you don't need to do any transaction in this. Once you invested in Mutual Funds you can sit relax now.

√ Once you set the mandate in bank of any amount like 1000, 2000rs per month for SIP. It will automatically debited from your account on that date and will recieve that amount to the Mutual Funds.

USE OF MUTUAL FUND :-

                    Use of Mutual Funds should be done for your Goal planning like after 10 years you need a funds for your child education, after 15 years you need a funds for your girls marriage or after 20 years you will need a Funds for your retirement. So you can start a SIP in various schemes like one scheme for education, one for marriage, one for retirement, one for holiday weekend tour or Vacation ,etc, etc.



COMPOUND INTEREST

                    The power of compounding is the  Warren Buffett’s success factor -

Ask Warren Buffett for the single most powerful factor behind his investing success, and he’d respond “compound interest” — without skipping a beat.

He’s been preaching this for seven decades, and it’s made him a billionaire. And it’s something every investor can copy.

QnA

1) Have you started SIP in Mutual Funds, comment down.
2) Which Scheme is better in Mutual Funds, Comment down.

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