Markets are always a best to create an investment for long term. Parking your funds in banks will not give you as much capital appreciation as in market instruments like equities, mutual funds, bonds and others.
Equities are the stock forms that you invest in certain companies, while funds are a pool of investors in the company. Bonds are nothing but the fund gaining some specified percent of interest for some years and there is sometimes a mix of these available. Mutual funds are said to be the best option for making your investments, among all these categories. Wondering why? Read on to know:
Mutual funds are the simple investment vehicle in today’s scenario. Unlike stocks where you need to have a check regularly and understand the base of all, mutual funds are simple in knowledge. They are basically a pool of investors who invest in a company shares and once the company grows your dividends also grow, giving pay-out. If opted for growth you get great capital appreciation in the longer term.
Now with SIP, this is even easier and lot hassle-free. You pay monthly the affordable amount and for a specified year of time, your capital grows along. At the end what you get is good returns along with capital money.
Unlike any other investment where you need to park your money all in one kind of investment, in mutual funds you have various types and various returning schemes that suits many. You have equity funds, balanced funds, debt funds, multi-cap funds, small cap funds, diverse funds, bond funds and many others. Rather than clubbing all your money together, you can split them and put in different baskets and allow them to grow. This helps you in the long term to balance any downside that occurs in one scheme.
Fund managers and professional assistance:
When we don’t have time to look into our investments they go haywire. But, in mutual funds, each fund has one or 2 fund managers who track down the performance of the fund and act accordingly as per the law of fund says. While hiring a personal fund manager is too expensive you can get the benefits here directly without any extra penny.
Ease of liquidity:
With mutual funds, you can turn your NAV’s anytime into cash and use it for emergencies, except for the closed funds. Mutual funds offer you very easy redemption policies, that the money you invested will be liquidated within a maximum of 48Hours or 2 working days in most of the cases.