As an investor, the primary objective would be to get maximum returns on your investments, with the minimum amount of risk. At the same time, an investor does not have the resources and knowledge to decide when essaywriterforyou.com to buy or when to sell. This requires a lot of time and market research, which requires specialists to perform the job. This is where mutual funds come in. Mutual funds offer you the following advantages :
Professional management: Adequately qualified professional Fund Managers manage manage the assets of the fund, along with a team of research analysts that continuously analyses the performance and prospects of companies where the investments are to be made. The fund managers also select suitable investments to achieve the objectives of the scheme. It is a continuous process that takes time and expertise which will add value to the amount of investment. Fund managers are in a better position to manage the investments and get higher returns on the investments.
Diversification: The cliché, “don’t put all your eggs in one basket” really applies to the concept of intelligent investing. Diversification lowers the risk of loss by spreading the money across various industries and geographic regions. It is a rare occasion when all stocks decline at the same time and in the same proportion.
More choice: Mutual funds offer a variety of schemes that will suit different needs of the investor over a lifetime. With mutual funds, you can link your investment plans to future individual and family needs and make changes as your life cycles change. You can invest in growth funds for future college tuition needs, then move to income mutual funds for retirement, and adjust your investments as your needs change throughout your life.
Affordability: For a small investor, it is not possible to buy shares of larger corporations For E.g. Investor A is willing to invest Rs 5,000. He cannot buy the shares of all the listed companies with that amount. Mutual funds generally buy and sell securities in large volumes which allow investors to benefit from lower trading costs. The smallest investor can get started on mutual funds because of the minimal investment requirements. An investor can start his initial investment with a minimum of Rs.500 in a Systematic Investment Plan on a regular basis.
Tax benefits: Investments held by investors for a period of 12 months or more qualify for capital gains and will be taxed accordingly. These investments also get the benefit of indexation.
Liquidity: An ivestor can redeem all or part of his investment any time he wishes and receive the current value of the shares. Funds are more liquid than most investments in shares, deposits and bonds. Moreover, the process is standardised, making it quick and efficient so that the investor can get the cash in hand as soon as possible.
Rupee-cost averaging: With rupee-cost averaging, if a specific rupee amount is invested at regular intervals regardless of the investment’s unit price, the money buys more units when the price is low and fewer units when the price is high, which can mean a lower average cost per unit over a period of time. Rupee-cost averaging allows the discipline to every month or quarter rather than making sporadic investments and increasing the risk of losing the capital invested.
Transparency: The performance of a mutual fund is reviewed by various publications and rating agencies, making it writemyessayrapid.com easy for investors to compare one fund with another. A unitholder, is provided with regular updates, for example daily NAVs, as well as information on the fund’s holdings and the fund manager’s strategy.
Regulations: All mutual funds are required to be registered with SEBI (Securities Exchange Board of India). They are obliged to follow strict regulations designed to protect investors. All operations are also regularly monitored by the SEBI.
Quick, Personalized Service: Most mutual funds now offer extensive websites with a host of shareholder services for immediate access to information about your fund account. Or a phone call puts you in touch with a trained investment specialist at a mutual fund company who can provide information you can use to make your own investment choices, assist you with buying and selling your mutual funds shares, and answer questions about your mutual fund account status.
Market Cycle Planning: For investors who understand how to actively manage their portfolio, mutual fund investments can be moved as market conditions change. You can place your funds in equities when the market is on the upswing and move into money market mutual funds on the downswing or take any number of steps to ensure that your investments are meeting your needs in changing market climates.