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Want To Meet Your Financial Goals? Mutual Funds Are the Best Solution

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For seasoned investors as well as novices, mutual funds are a great investment avenue. Mutual funds are those funds that have their corpus stashed in stocks (equities) and/or bonds (debt). When you buy a share of a mutual fund, you actually buy a portion of the total fund corpus. So, people, who haven’t much idea about stocks and bonds, can simply invest their money in mutual funds, which then gets allocated in various asset classes according to the objective of the fund and the financial goals of the investors.

So, mutual funds definitely are the order of the day. And below you find all the reasons that make these funds the best option to meet financial goal -

You get a diversified portfolio -

Investing in mutual funds means obtaining ownership of scores of individual bonds and stocks. That means your eggs don’t remain in one basket, and you get a diversified portfolio. It is this diversification that makes mutual funds such an amazing investment option for so many investors. It is not just invested across asset classes but also industry sectors. The most important benefit of having a properly diversified portfolio is that it withstands market volatility besides offering desirable growth.

Costs are low -

Buying tens of individual stocks is not a feasible option for people who lack in resources or are constrained by time. When you buy individual stocks and bonds, you don’t just have to pay a lot, but also monitor the rise and fall of the market constantly. In addition,a lot of your time gets spent. The benefit of investing in a mutual fund is that your transaction costs remain low.

Minimum investment cap is low -

If you want to buy even one share of the stocks in the nifty index, you might need more than a lakh of rupees at your disposal. But mutual funds allow you to invest in them without actually spending a lot of money. If you want to invest in mutual funds, you can start as low as INR 5000. If, however, you wish to know which products have the lowest investment allowance, you must consult a mutual funds advisor. Since advisors know the tricks of the trade they are able to guide you in the best possible manner.

Management of the fund is done professionally -

The single goal that every mutual fund manager wakes up in the morning with is to undertake research, study, and analyse present as well as potential holdings for the fund that they are looking after. And your financial advisor studies different mutual funds and how well they are performing under their respective fund managers, to select the best funds for you. So, the one thing you can be sure about is that mutual funds are professionally managed.

Systematic Investment Plans (SIPs)

With SIP you can invest as little as INR 500 in mutual funds, that too on a regular basis. When you tell your mutual fund company about your bank mandate, they pull the money from your bank account accordingly. If it’s SIP, amount gets periodically withdrawn from your account and gets invested in your fund. So, there is incredible investment convenience with SIP. And you don’t always need a huge sum of money for making Mutual fund investment.

There is transparency -

When you invest in a mutual fund, there is ample transparency. You can see how well your fund is doing as well as what your fund manager is up to. Your financial advisor presents every detail in front of you in the form of a factsheet.

Liquidity -

You can sell your holdings whenever you wish to. And there is no delay in when this money reaches your bank account. Illiquid investment items such as real estate cannot be bought and sold so easily.

Risk appetite -

Every asset class comes with certain amount of risk. And that is why you should opt for an asset class according to your risk tolerance. Now, the amount of risk you are able to take depends on your age, income time horizon of your investment. Mutual funds are an amazing investment option to fulfill your financial goals because you can choose products according to your risk appetite.

So, whatever your financial goals are- retirement saving, buying real estate, education, or the growth of your money- you can achieve it effortlessly by investing in a mutual fund.

Mr. Ajay Kumar Jain, M.Sc, Chairman And Managing Director
Being the Chairman And Managing Director, he focuses on holistic investment planning and wealth management and tries to make investment planning simpler for retail and HNI investors. Investor education is one of the prime things that Mr. Ajay Jain focuses on as he believes financial education is the foundation of successful investing. With over two decades of experience, Mr. Jain has made a mark in the Indian mutual fund industry due to his compassion and sheer hard work.

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