Jul 11, 2016 3 min read

Disclosing the secrets of mutual funds exceptionally

Here is presenting to you the tried and tested methods of investing in mutual funds. The investment experts of our team have researched to devise the steps which would help the clients to generate income easily.

People often get confused while choosing the correct investment option for deploying their hard-earned money to earn maximum profit. From property to stock market the clients have an array of avenues which attract the clients towards themselves. But, all these choices have their own limitations which makes it difficult for the clients to cope up while investing and getting desired results from them is always subject to luck. In a situation of dilemma mutual funds have emerged as the most reliable source of investment assuring guaranteed returns to the clients. Mutual funds are a pool of money which is collected from the clients to invest in the shares, bonds, securities, etc. for providing a shielded investment process.

Why mutual funds?

There are a lot of reasons which have magnetized the clients to pick mutual funds as their instrument for generating capital gains. It has a systematic investment strategy along with easy monitoring of the client’s schemes. The following points provide an edge of excellence to the mutual funds:

Diversification simplified

“Don’t put all your eggs in a single basket”, as quoted by the famous Warren Buffet, signifies the importance of having a diversified portfolio. You might have noticed when the daily schedule gets monotonous it produces adverse results such as foul mood, sudden outrage, etc. One needs a life which contains vibrancy and a mix of experiences. Similarly, while investing it is necessary to place your money in non-identical schemes. For example, the rates of property are rising day by day. Hence, if a client invests in land then he/she cannot afford to diversify elsewhere. Likewise, the price of stocks is such that it restricts clients with limited resources to buy shares of numerous companies. But, mutual funds allows the clients to enjoy a copious profit gained by investing in various spots at the same time even with a small amount invested regularly. The diversification also enables the clients to avail the freedom of being free from the tautness of loss as the money is distributed among various platforms.

Liquidity at client’s disposal

The ease of withdrawing money as and when required is the prime focus of the clients while selecting an investing mechanism. If a person invests in land and requires the invested sum within a few days, then it becomes difficult for him/her to do so as it takes a lot of time to sell and purchase land. But, in mutual funds the clients are able to redeem their investments easily. Only a service request has to be filed by the client either through offline or online mode and the money would be transferred to the client’s account within 2-3 business days. In liquid funds, the money gets credited in a single working day itself. Thus, mutual funds provide an edge of liquidity to the investors through an easy process.

Less prone to fluctuations

Even though the mutual funds are linked to equity market they show less ups and downs as compared to individual stocks. However, NAV of schemes shows a zigzag pattern, but does not result in the loss of entire invested sum as it happens in stock market. The profits might decrease, but the principle amount will remain undisturbed. Thus, one can conclude that mutual funds produce more stable returns as compared to the stock market.

Never compromising on security

As we all know, the mutual fund is a pool of money invested by different clients having common investing requirements. The money accumulated is managed by fund managers, who are experts in understanding and investing in the market. The managers make it a point to invest the money at places which are selected after double checking. Providing the returns to the clients is their liability. The mutual funds are secure as the holdings are on paper and none can invest or redeem them except the holder himself.

Thus, mutual funds are preferable as they are more secure, flexible and involve less formalities. Now with the introduction of online investment method, it has become even more easy for clients to invest and withdraw their money.