Today will bust some of the most prominent myths surrounding Mutual funds and share a few facts about mutual funds to help you better understand this intelligent investment option.
Myth :
To invest in mutual funds, you need a substantial quantity of money.
Fact :
Using SIP (systematic investment plan) for mutual funds, You can invest Rs. 500 in mutual funds per month. Therefore, it is a Misconception that you need a large amount of money to invest in mutual funds.
You can invest in large numbers as well as a small number through the sip.
Myth :
Shares are less risky than mutual funds.
Fact :
Mutual funds are considered safer than Shares.
All of your eggs are in one basket when you buy individual shares, but mutual funds are designed to diversify your portfolio, making them the safest option.
For instance, mutual funds invest your money in 20 different stocks rather than putting all of it on one horse. So, it is simple to determine which investment choice is safer.
Myth :
Only long-term mutual funds are offered.
Fact :
Depending on your financial circumstances and investing goals, mutual funds can be long-term, short-term, or even medium-term.
Mutual funds, on the other hand, are renowned for the large returns they deliver via the force of compounding, which pays off when you invest for the long term.
You may pick from a selection of mutual funds based on your needs. Debt funds are a better option for you, for instance, if you're seeking a short- and medium-term investment opportunity. Long-term investing, however, needs equity funds.
The greatest investments for the long term are mutual funds. It is well recognized that long-term investments offer multiple profits.
Myth :
Investments in mutual funds are subject to a Lock-in period and are difficult to simply redeem.
Fact :
Only closed-end and tax-saving (ELSS) mutual funds have lock-in periods; all other mutual fund investments do not. Depending on the kind and duration of your investment, an exit load may be imposed for some mutual fund investments made prematurely.
Myth :
Mutual funds only invest in equity markets.
Fact :
The diverse portfolio of mutual funds comprises securities such as equity shares, corporate deposits, government treasury bills, commercial paper, gold, and real estate.
Mutual funds give investors access to a range of asset types, allowing them to create diversified financial portfolios.
Myth :
Too young to start Investing
Fact :
Contrarily, the earlier you start investing, the more money you may amass. With mutual funds, there is no such thing as being "Too Young." No matter their age, experience, or line of work, anybody with the intention to start investing may do so thanks to the knowledgeable analysts and portfolio managers in mutual funds.
Experts concur that starting early with mutual fund investments is preferable. This is due to the fact that it enables you to stay involved in the market for a long time and utilize time to your favor when the market experiences an unheard-of catastrophe.
Myth :
The ideal use of SIPs is with equity mutual funds.
Fact :
Unaffected by the sort of mutual fund you choose to invest in, SIPs are still an excellent choice. SIPs are appropriate for all types of mutual funds, including equity, debt, and hybrid ones.
Myth :
Debt is preferable than equity.
Fact :
It would be inaccurate to suggest that one debt fund or equity fund is superior to the other because they serve distinct goals, such as debt funds' ability to withstand market declines. Equity funds, on the other hand, are reputed to offer superior returns.
You may discover that, depending on your particular circumstances, debt funds or equity funds fit your financial strategy better. But first, fully comprehend both mutual funds and choose which one best fits your needs.
Myth :
Investing in mutual funds needs many Times of "Know Your Customer" (KYC).
Fact :
Although KYC is a requirement for investing in mutual funds, it only has to be done once.
The procedure is now simple and easy thanks to digital banking. Hence, instead of worrying about the KYC procedure, worry about the false information about mutual funds that prevents investors like you from taking advantage of fantastic investment opportunities.
Disclaimer: All Mutual Funds are subject to market risk. Please read all scheme-related documents carefully.
0 Comments