Mutual Fund Investment: Many questions arise in your mind regarding investing in mutual funds. What is mutual fund and how to invest in it. Is a demat account necessary for investing in it? How to get returns in this. How is it different from other investment options? Know the answers to all these questions from Harshad Chetanwala, co-founder of mywealthgrowth.com.
What is Mutual Fund?
Mutual funds are a very good way to invest. In this, you can invest in different categories in different ways. Many investors in mutual funds give small savings to a good fund manager. The fund manager invests your money in different places, on which you get returns. The fund manager always thinks about your portfolio and investments. If investing in mutual funds, then we do not need to be an expert because this work is done by the fund manager.
Is demat account necessary?
It is not necessary to open a demat account to invest in mutual funds. If there is a demat account, then that is a different matter. When you think of investing in the fund, do not invest just on the basis that this fund has given good returns or this fund is good. Rather, on the basis of your need, such as children’s education, marriage, dream vacation or car, one should invest by making a goal.
How to set goals?
There are more than 1000 schemes in mutual funds today. These include equity and debt schemes. Fund managers invest in bonds of companies in debt funds and the returns that come from there are given to the investors. On the other hand, investing in equity funds is for the long term. If your investment target is above 5 years then you should invest in equity funds.
Debt funds are a better option if short term. In this, if you want to keep the money for 1 month or two months. There you can invest in liquid funds or ultra short funds. If the goal is of 2 or 3 years, then you can invest in corporate bond funds or banking funds. Whatever fund you are taking, a little homework must be done about it.
Which scheme to choose when
Everyone can invest in Mutual Funds. One who earns or saves. Through this, you can invest not only in the stock market or debt but also in gold, realty. Now there is an opportunity to invest in International Fund also.
If you are young and want to start investing then you have a long time to invest. But keep in mind here that when we need money. For example, if we want to get a house in 5 years, then we should invest some money in equity and some money in debt funds. If the goal is 10 years or more, then you can make big corpus through equity.
Invest through AMC’s website or app
If you have complete information, then you can invest directly through the Asset Management Company (AMC) website or through its app. If you need professional help for portfolio or need proper funds for yourself then you can invest through app aggregator. Here you get the entire portfolio in one place.
How to start new investors
First of all, if you want to start investing, then you have to do KYC. Just as KYC is done for bank account by giving PAN, Aadhar, address proof. Similarly, to start investing in mutual funds, you have to do KYC. Here KYC has to be done only once. After this you can invest in many schemes. For this, you usually have to provide PAN card and address proof. It can be done both online and offline.
If you are investing in mutual funds for the first time and you have complete knowledge about the scheme, then you can invest in direct plans. At the same time, if the information is not there, then the regular plan should be chosen.
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