With the rising economic growth in India, there is also an evident growth in people indulging in splurging (spending on food, clothing, education, property, luxury, etc.). Since the introduction of globalization and liberalization, there has been a great exposure experienced by the Indians leading to consumption of global goods, travelling overseas, etc. But with this money flow of income and expenditure, a wise Indian has also become alert to save for the future. The growing economy also demands smart investment plans given the numerous options available to the investor. With multiple options, it is advisable to go for top mutual funds. Mutual funds have seen potential growth in the Indian market in recent times.
Mutual funds are a way to own more diversified and higher priced stocks for a small amount of money. It is much simpler in comparison with investing in exclusive shares of a company as the portfolio holds shares, bonds of many companies in small values managed by a financial expert who can guide to invest in the top mutual funds. There are various types of mutual funds like specialty funds for a particular market sector, index funds, real estate funds, etc.
With mutual funds, investors will own numerous small pieces of several companies. In other words, you will be earning small dividends from numerous companies. The best part is that you are earning for doing nothing!
For a modest Indian investor, investing in shares of a particular company holds more risk because if the market falls it leads to a huge financial loss but on the other hand if smart investments have been made in top mutual funds, then even during liquidity, the loss for a company balances out (profit dividends from other holdings and only small loss in a particular one).
The investor can plan for either short-term investment or long-term investment. The purpose of long term investing for investors is to meet their future goals such as saving for children’s education, retirement etc. Unlike short term investments which aim to increase profit in a shorter span of time, long term investments frequently make use of the ‘buy and hold ‘approach based on the idea that in the long term, the equity market will give a favorable rate of return in spite of periods of decline or volatility.
In fact, investing in top mutual funds is a fruitful endeavor, firstly, the investor gets to manage a portfolio without much risk of loss, secondly, it introduces the investor to the investment market and offers a learning experience to analyze the market fluctuation and thirdly, helps in creating wealth as per the risk taking ability. In a country like India, where everybody dreams of accumulating wealth and lead a life without worrying about the basic needs, mutual funds prove to be a common man’s tool for safe and effective wealth creation.
But nothing in this world comes with 100% security and every deal comes with a clause, “mutual funds are subject to market risk, read the offer carefully before investing” just to make the investor aware of the little risk that is always involved.
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