After AMFI’s “Sahi hai” campaign awareness about mutual funds have spread across the country, The campaign answered all the basic questions of the investors, like can I withdraw, how safe is it etc…
Indeed mutual funds are the best financial instruments to invest in if you want your money to grow.
How can Mutual funds benefit you? they can help you achieve financial freedom, they can help you achieve your financial goals.
Let’s look at 9 reasons you should invest in mutual funds
1) Well Managed Risk
By now we all know that mutual fund investing is subject to market risk, Mutual funds invest in equity and debt markets. AMCs or mutual fund companies simply pool in money form lacs of investors and invest that money in high-quality assets. Now since this is a professional service,
Mutual fund managers manage risk very very meticulously. They have processes and systems in place that can try to avoid loss-making investment by managing known risk. For example, they will not invest in poor quality companies, they will invest in debt instruments with due diligence and proper process in place.
In short Mutual Fund, houses manage risk well.
2) Expert Managing Your Money
When you invest in mutual funds, the money is pooled in and the respective fund houses appoint stock market veterans and experts to manage this money. Generally, these are very very qualified and experienced professionals who charge very very high fees or salary to manage such a huge fund. Retail investors like you and me would not be able to get access to such experts to manage our money. It’s only through mutual funds that we can get experts to manage our money no matter how little or how big the investment is.
3) Tax Saving
Investing in ELSS or Equity-linked saving schemes you can claim tax benefits up to INR 1,50,000 under Section 80C. There are many other instruments that provide tax benefits under various income tax sections. However, ELSS is one of the topmost performing instrument across available options.
This is one strong reason why you should invest in ELSS mutual funds
4) Highly Liquid
Mutual funds are highly liquid instruments, meaning you can invest whenever you want and also withdraw your money whenever you want. It might take a maximum up to 3 days for funds to reach back to your bank account.
In some cases, there might be an exit load meaning nominal fees for premature withdrawal of mutual funds. The best benefit of mutual fund investing is that your funds can reach back to you quickly if you need in case of an emergency.
5) Flexible Investing Options
Mutual funds allow you to invest as low as INR 500 in a particular fund. They are so flexible that you need a huge capital to start. Invest whenever you want in whatever amount above INR 500.
Also, there are various ways or methods you can invest in mutual funds which makes it the most lucrative instrument for retail investors.
Lumpsum: In simple terms, lumpsum is to invest any amount whenever you want.
SIP: Invest a fixed amount in a fund each month, this helps create discipline and starting with small but regular investments
SmartSIP: A Modern-day order type pioneered by RankMF.com which smartly buys and sells mutual fund automatically based on AI and ML inputs in order to maximise returns on investment. SmartSIP beats SIP returns by huge margins. SmartSIP is a disruption in the mutual fund industry created and developed by RankMF
6) Better Returns
A mutual fund is simply one of the best investment instruments that can potentially give you superior returns compared to traditional investment options like gold, FD, bonds, PPF etc.
Others might just cover for the inflation however mutual funds can create alpha for you and make your money grow
7) Participation in Equity Markets
We all know the stock market has the potential to create huge wealth for great investors, However, not everyone is a research expert who can pick stocks or understand stock markets and economy. What to do in this case where you want to make your money grow but you do not understand Stock markets?
The answer is simple: Invest in mutual funds which indirectly buys stocks for your money. They are experts they understand stock markets, so they invest your money in equity markets on your behalf and pass on the returns to you for a nominal fee.
8) Funds For Everyone
Does not matter you are 18 years old or 50 years old. There is a fund for everyone, There are a lot of categories of funds available and a lot of options to choose from which other investment instruments might now have.
9) SIP Option for Financial Goals
Mutual funds have this beautiful option to invest in them via SIP aka Systematic Investment Plan. Which is investing a fixed amount in a mutual fund on a fixed date in a disciplined manner.
Now when you do that power of compounding kicks in and helps you achieve your financial goals faster and easier.
If you still need more reasons to invest in mutual funds, we would recommend that you stick to a fixed deposit, because clearly you won’t be interested in being wealthy 🙂
East of West, Mutual funds are the best