Basics Of Mutual Funds, “The Most Common Financial Product”

By | 22/02/2019, Best On-Call Financial Advisory Portal talks about one of the most common financial product, Mutual Funds. In this article you will find the significance of mutual funds in our lives.

When capital collected from different investors is invested in company shares, stocks or bonds, then mutual funds come into existence. Generally, a mutual fund is managed collectively to earn the highest possible returns.

It is one of the easiest means to grow your wealth. All mutual funds are registered with SEBI (Securities Exchange Board of India) and hence it is quite safe. It is one of the methods of making investing easier for you. Therefore, each fund is designed to fulfil different financial goals.

When to invest?

When you have money, it is the best time to invest in mutual funds. This doesn’t mean that these funds are expensive. One of the basic rules of investment is to start early.  But last minute investments often start from hasty decisions. If you delay, there is a possibility of losing out on potential returns. So, the right time is to invest now.

How to invest in mutual funds?

It is always preferable to invest your capital in various mutual fund investment instruments as you can stabilize the risk involved in investing. In case if one fund is not yielding good returns, you will be protected by the other investment instruments.

Benefits of mutual funds

  1. Professional Investment Management.

By pooling the money of thousands of investors, mutual funds provide full-time, high-level professional management that few individual investors can afford to obtain independently. Such management can be important to achieving results in today’s complex markets.

  1. Diversification.

Mutual funds invest in a broad range of securities. This limits investment risk by reducing the effect of a possible decline in the value of any one security. Mutual fund shareowners can benefit from diversification techniques usually available only to investors wealthy enough to buy significant positions in a wide variety of securities.

  1. Ease of Investing

You may open or add to your account and conduct transactions or business with the mutual fund by mail, telephone or bank wire. You can even arrange for automatic monthly investments by authorizing electronic fund transfers from your checking account in any amount and on a date you choose.

  1. Safekeeping

When you own shares in a mutual fund, you own securities in many companies without having to worry about keeping stock certificates in safe deposit boxes or sending them by registered mail. You don’t even have to worry about handling the mutual fund stock certificates; the fund maintains your account on its books and sends you periodic statements keeping track of all your transactions.

  1. Online Services

The internet provides a fast, convenient way for investors to access financial information. A host of services are available to the online investor including direct access to no-load companies.

Documents required to apply for mutual funds

  1. Resident Indian citizens need to submit only their KYC documents along with the application forms to invest in Mutual Funds.
  2. Non-resident Indians need to submit the following supporting documents in addition to PAN as proof of identity and address.
  3. If any of the KYC documents are in a foreign language, they have to be translated into English before submission.

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