Mutual Funds – Sahi hai?

Mutual funds

Mutual funds is a type of investment in which one will invest money in various programs through diversification which reduces the risk of investment and increases the return of investment.

Programs like Stocks, Money market instruments, Securities, Bonds, etc.

Easy?

Understood?

confused?

Let’s try to understand it in a simpler way

After getting salary every person saves a small amount from it, right?

maybe for emergency or to buy a home/ car can be any reason

And

what are the ways of saving?

well, most simpler way is

saving in a bank account

But

due to inflation, your money loses its value

As it is not generating interest in your account

So

people put them in different schemes

like FD (Fixed deposit), RD (Recurring Deposit), Gold, and Real Estate

some also invest in the stock market.

And every investment has three things

Return, Risk and Time

where RETURN always sees in percentage

and if the return percentage is below the inflation rate, it is considered a bad investment

however,

if the return percentage is more than the inflation rate then it is considered as a good investment

RISK means how risky is the investment, will it return good or not

TIME means for how long you will invest to get returns.

Apparently

if RISK and TIME in investment is higher then obviously RETURN will also Increase

That is why it is highly recommendable to invest in different schemes or programs

which eventually reduces the RISK factor.

because it’s not possible at the same time RD interest rate and gold return rate or real estate value falls simultaneously

This is known as SIP (Systematic Investment Plan)

And

MUTUAL FUND is an investment program operates by Asset management company helps investors like you and me to invest in various
programs by investing in a single program which is mutual funds

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