To see your wealth grow with time, investing in a very systematic manner is very important from the beginning. Just depositing a chunk of your salary every month in your separate savings account will yield nothing fruitful. This is where the investment in the best mutual funds steps in.
One of the most sought-after investment schemes, this investment has helped many individuals grow their wealth exponentially. But, it all depends on the investment goals and risk tolerance of the potential investor.
What are mutual funds?
It is a type of investment instrument that pools money from multiple investors to purchase a diversified portfolio of securities. These securities include stocks, bonds and other assets. It is managed by a professional fund manager who invests the pooled money into various assets. The ultimate goal here is to maximize returns and minimize risks.
In this overall investment process, the investor tends to buy shares in the mutual fund, and the value of the investment depends on the performance of the securities. So, when the profit is earned by the mutual fund, the share value increases. On the other hand, when it incurs a loss, the value of the share decreases. If you are earning, you should go for tax saver mutual funds that help reduce tax liability.
What are its pros?
● Diversification
The topmost advantage of mutual funds is diversification. Since a mutual fund pools money from multiple investors at once, the professional (fund manager) handling it invests in a diversified portfolio of securities, which helps spread out the risk.
● Liquidity
These funds are generally liquid in nature, which means that the investors can buy and sell shares at any time. This makes it a convenient investment option for those who want to gain access to their money quickly.
● Convenient
Investing in the best mutual funds is quite convenient. You just need the right application on your internet-enabled smartphone. Once you invest in it, the mutual fund takes care of the day-to-day management of the portfolio, so investors do not have to manage their investments actively.
How to invest in mutual funds?
Around four months ago, when I was planning to invest in mutual funds, one of my associates told me about the Bajaj Finserv application. Well, I was already using this app for digital payments but never focused on the investment section.
- Download the application on your device
- Sign up by using your mobile number
- Go to the Mutual funds under the Investment Bazaar section
- Proceed as per your requirement
Conclusion
If you are planning to invest in mutual funds, then remember that you need not go anywhere. Just be in your comfort zone, pick up your smartphone and invest right away. Do your groundwork on the best mutual funds; you are more than good to go!
