The benefits of investing in a mutual fund are far more than its disadvantages. In this post, we are going to discuss the advantages of investing in mutual funds.
The number of investors who have started using the mutual fund services is only increasing over a period of time. To beat inflation one has to invest in the stock market and for those who do not have expertise in the stock market mutual fund route is the best.
The mutual fund is a system and platform where all the parties come to achieve a common goal of getting positive returns on the invested money. Below is the definition of mutual fund from Investopedia.
When an investor buys a stock in ITC Limites is becomes a part owner of the stock. When an investor owns the stock he is a limited partner to the company with part ownership of the company and its assets. Similarly, when a mutual fund investor invests in the mutual fund he becomes a part owner of the mutual fund company and its assets.
Advantages of Investing in Mutual Fund
Overall advantages of the mutual fund are more than the number of disadvantages. Although before starting to invest in the mutual fund it is essential that as an investor one must consult a professional financial advisor or have an understanding of certain concepts such as time horizon & risk tolerance. Also, to have a thorough understanding of the current financial situation.
Let’s start with the various advantages of the investing in mutual fund.
This is one the biggest advantages in mutual fund investing. You can start investing as low as Rs. 500 and get access to the professionally managed fund along with right diversification mix. The first place you cannot appoint a professional fund manager for the same amount of money. There is no upper limit to the amount you can invest. Because of diversification if one sector is not performing well then other sectors would compensate the non-performance of the other sector.
You can invest in the mutual fund for Zero Charges Flat.
Mutual Fund is regulated by SEBI. There is a system in place for the way the funds are managed and the way investments are done. Since this falls under the purview of the market regulator various aspects of transparency are taken into consideration than otherwise would have been done.
The mutual fund investors have the flexibility to change their funds without any extra charges (in case of an open-ended scheme) as an when they feel like. Even based on market conditions or decision-based on your own research. Even if you change your financial advisor his recommendations can be immediately implemented hassle-free immediately.
High Networth Individuals have access to specialized professionals who can invest in the stock market on their behalf. The membership is limited to very few and the entry reserve price is very high usually start from Rs. 25 Lakhs. Which is not accessible to many people or rather most of the people cant access such high entry investment. On the other hand, mutual fund investments are handled by experienced professionals who have the exposure to the changing dynamics of the share market and the economy. And the investment starts from as low as Rs. 500 per month.
The options for investing in the stock market through mutual fund route so many that it becomes very easy to diversify. Mutual funds score the highest when it comes to diversification they offer by spreading your money across different investments like equity, fixed income, gold, commodities and real estate. Below is the list of options available for investing in the mutual funds.
It is very easy to exit from the mutual fund. All that you have to do is call up your broker/agent and ask him to sell off your entire holding and the amount would be in your account in 48 hours. The only caveat is that if you withdraw the amount in case of emergency and if the mutual fund is making a loss you would be forced to book the loss for the same mutual fund account.
Over To You
Start investing with zero charges and zero brokerage account in mutual fund and the stock market.
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