Why Invest in Mutual Funds?

Why Should i Invest in Mutual Funds

Invest In mutual funds is really good option for retail investors. When you are going to invest the money of savings, it is necessary that you keep in mind the important principles of investing so that you can get only, only and only success, profit, not frustration or loss.

Top 7 Reasons to Invest in Mutual Funds

Money is behind almost all our activities. Every person needs some kind of money to fulfill his economic needs and to get this money we do some economic activity i.e. Business, Jobs, Service or trade. A large part of the money we spend on daily activities and remaining part is reserved for the future needs. This remaining part is called savings. Everyone thinks of a few things before investing their hard earned money. So mutual fund are the best option for investors.

In this regard the following points should be kept in mind.

Safety

Wherever, the scheme in which you invest your money, the first objective should be its safety. Because as long as the principal amount is not safe, then the question of increasing it or earning income from it does not arise. Therefore, think once more before giving your capital in the hands of others.

Although keeping money in a vault is more secure from the point of view of security but it does not serve the purpose of investment. Here the meaning of security is that the capital should be invested in those means or schemes in which there is no possibility of drowning of money.

Note: All Mutual funds are regulated by SEBI.

Income

The second objective of investment is to earn income. Because investment itself means that capital is being used for the future by sacrificing present consumption. There must be some income in return for this sacrifice. Some people have sole purpose to earn income like retired person or elderly person. Therefore, according to your objective, you should choose such an investment option that provides adequate income along with the security of money.

Liquidity

Investment liquidity means that you can get your invested money back whenever you want. That is, convert it into cash and fulfill the purpose for which the savings were made. Because if the necessary money is not available at the time of need, then its value decreases. Therefore, one should choose that form of investment, which can be converted into cash without any delay, hindrance or huge expenditure.

Appreciation

An important objective of investment is that whenever you get your invested money back, it should come in an increased form and must increase at least as much as the rate of inflation has increased. Therefore, the same option of investment is considered good in which along with security and income, the investment capital also keeps on increasing.

Governmental and Social Recognition

Since you are a social person and living under the umbrella of the government. Therefore, any investment will not be considered good unless it has received social and state recognition. Therefore, avoid investing in schemes or institutions engaged in illegal and anti-national activities.

Risk

All investment options involve risk. It is a different matter that in some the risk is less, in some it is more. Therefore, the investor should invest his capital in the same instrument or scheme whose risk tolerance capacity is there.

Nomination

Since investment is made for the future. Therefore, that investment option is considered good in which there is facility of nomination of his heirs so that the heir can easily get the investment amount in case of absence of the investor in future.

Conclusion

In this way, while choosing the investment instrument or option or scheme, keep in mind the safety of investment, income, capital growth, etc. and while making the decision, it will be good if you include the following things in your nature

Take a Look

How Many Types of Mutual Funds are Available?
Which Groups are Involved in Mutual Funds?
What are the Features of Mutual Funds?
Mutual Fund Holders Rights and Protections Available in India
Mutual Fund Investment Plan – Direct Vs. Regular Funds
Why ETFs Investment is a New Attraction for Investors?
How Mutual Fund Investment Can Improve Your Wealth.
2021 Best Period for Pharma and Healthcare Funds
What is a Mutual Funds? – Introduction
When to Invest in a Mutual Fund?

Leave a Reply

Wait! Looking for Best Demat Account

"FREE Investing in Stocks & Mutual Funds"

+1 Crore Happy Customers
Zero Brokerage on Equity Delivery Trades
Flat ₹20 or 0.03% (whichever is lower) for Intraday and F&O
Trade with the best platforms and tools

Click & Open Demat Account

Zerodha open an account for online trading
Share via
Copy link
Powered by Social Snap