Reasons to Invest in Mutual Funds Along with Other Investments
Investment can be of different types. Some people invest in shares while others open a savings account with the post office. Many others stick to the traditional way of depositing money in their bank saving account unmindful of the fact that it will give them low returns.
However, apart from all these ways, if you invest in mutual funds online, you could end up creating a decent sum for yourself in a few years.
Mutual funds can be considered as professionally managed investment schemes that are run by asset management companies.
By investing in these, the investors can put in their money in diversified allotment of securities which experienced fund managers look after.
Below are listed some key reasons as to why you should invest in MF online.
These follow Systematic withdrawal Plans
In this method, money can be withdrawn from mutual fund investments in a systematic manner. Let us consider that a person has invested Rs 2.4 Lakh in a fund, and thus they can set up a systematic withdrawal plan in which Rs 20,000/- can be withdrawn for 1 year.
This way, the investor can earn a regular income for 12 months. This plan is particularly beneficial for the retired people as it enables them to spend money judiciously.
The frequency of withdrawal can also be chosen to be as on a monthly basis, semi-annually or annually depending upon the imminent requirement. This is a convenient investment option as the cash flow can be customized as per the need.
Ease of investment and monitoring
Mutual fund investment has the key advantage in the form that the investors can begin by investing a minimal amount of Rs 500/- also per month through a SIP (Systematic Investment Plan). There are many online platforms through which investments can be made in the mutual fund through the click of a button only on the smartphone.
These mutual funds not only give the investor different modes of investment but also enable them to pick up and select any particular amount that suits them.
Assessing the account statement and portfolio details are very easy, and if an investor pays attention to the fund, they will gain valuable insights on the same in minimal time only which will allow them to make intelligent investments in the long run.
The investor can also set up automated bank debits, and it makes it possible for the fund to withdraw the pre-decided amount automatically from the bank account, removing the hassle of visiting the fund office physically every time to deposit the amount.
Higher Rate of Investment (ROI)
Any investment is made with the objective of achieving a higher rate of interest in the long run. This is particularly important as inflation has to be beaten, and savings for meeting out the needs of the future are also to be done.
It always depends upon the fact that the investor has made an investment in medium or long term mutual funds. Either way, mutual funds are known to provide the investor with a higher Rate of Investment (ROI) in comparison to any other traditional investment option.
The risk of market fluctuation always remains, but if it is a long term mutual fund, the investment stabilizes and eventually gives a good return to the investor. This happens due to the reason that the fund managers associated with the mutual fund are investing this amount in different sectors and industries.
Mutual funds are known to assist the investors in getting higher returns that are always inflation-adjusted, and they also not have to put in much effort and time on their part.
Funds managed by Experts
One of the fears that many investors have is that their money could fluctuate as this might not be looked after in a professional manner.
However, the truth is that these mutual funds are managed by professionally qualified and competent fund managers who invest the amount carefully and judiciously based upon their skill and research they keep conducting in the market.
Risk management is something that a common investor cannot handle when they decide to invest in the mutual fund. It is thereby left to the fund manager to cater to this aspect, and they fulfill this obligation to the core, making an investment in a mutual fund a profitable decision for the investor.
This is unlike any other investment scheme where no dedicated fund managers are available to monitor the investment or help it grow at a rapid pace.
Therefore investment in a mutual fund is considered an intelligent option for making money grow at a faster pace and beat the cycle of inflation that otherwise eats up into the hard-earned money of the investor.
Invest in a mutual fund and reap the benefits!