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Mutual Fund: For those who want a combination of risk and return

For a common man, a sound financial situation is much required. He saves a good amount from his income for the future and hence looks for an option where his money is safe and can have them back as soon as he requires. He does not want to take much risk for desired return also. Observing the requirements of the investors, there are many avenues which can help the investor get his financial goals achieved. The investor needs to explore all these avenues before choosing anyone and invest the amount which he feels like the best option. As per the experts, the mutual fund is the right option for such investors.

The mutual fund:

One can find various companies in the money market that operates a mutual fund. It is a pool account where the money of the investors is deposited, and all money in this account is invested in the share market with the help of an expert fund manager. Here one needs to note that the companies do not invest all amounts in one company’s share. It needs to diversify the investment and get the best return that can suit the requirement of the investors in the market.

The options:

In a mutual fund, one can find funds such as open-ended and close-ended. The primary difference between both of these options is the withdrawal of the fund. In open-ended one can get the required money as per his will, which is not the case with the close-ended. In close-ended funds, one needs to keep the money for a certain period. Even if one goes for the open-ended fund, the company needs to offer a good return, which is possible only with the help of the share market. Here one can go for a company with mid cap mutual funds where the probability of fetching good return is high. The NAV of the MF companies keeps on changing on the basis of the return availed from the market. It is distributed among the investors whether one has opted for growth option or dividend one.

Start investing:

Those who want to invest in a mutual fund can start it with the help of investing in SIP with an amount as low as 500. One can also go for a lump sum amount of 1000 for a one-time investment. The SIP is the option where the investor can invest on a monthly basis, and hence, one can have the power of compounding as well as averaging the risk. As there are experts who handle the investment, one can easily rely on them and keep the fund invested for the long term. One needs to note here that this investment requires some time to grow and hence, one needs to keep patience for the same.

The NAV that is the net asset value of the unit is provided to every investor via, email and call centre. Even the local office of the concerned mutual fund also helps one get the NAV to the investor. Hence the transparency of the system can make one get complete information about the investment.

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