SIP Or Lump Sum Which Is Better ?

What are the advantages of mutual funds

There are 5 key advantages of investing in mutual funds:- 1. Risk Diversification: Mutual funds help investors diversify their risks by investing in a fairly portfolio of stocks across different sectors. A diversified portfolio reduces risks associated with individual stocks or specific sectors. If an equity investor were to create a well diversified portfolio by directly investing in stocks it would require a large capital outlay. On the other hand mutual fund investors can buy units of a diversified equity fund with an investment as low as र 5,000/- only (even lower for ELSS funds). Further mutual funds are managed by professional fund managers who are experts in picking the right stocks to get the best risk adjusted returns. Retail investors often lack this expertise. 2. Economies of scale in transaction costs: Since mutual funds buy and sell securities in large volumes transaction costs on a per unit basis is much lower than buying or selling stocks directly. 3. ...

Investment Pyramid Strategy

Mutual fund Higher To lower Risk Fund Type Investment Pyramid A Mutual Fund is a company that combines the investment funds of many people with similar investment goals and invests the funds for these people in a wide variety of securities. The individual receives shares of stock in the mutual fund and through the mutual fund are able to enjoy much wider investment diversity than they could otherwise receive. Each shareholder, in effect, owns a part of a diversified portfolio that has been acquired with the pooled money. As the securities held by the fund move up or down in price, the market value of the mutual fund shares moves accordingly. When dividend and interest payments are received by the fund, they are passed on to the mutual fund shareholders and distributed on the basis of prorated ownership. The above is a simple non technical chart of Mutual Fund categories by risk and reward. It should help you ...

Mutual Fund 4 Wealth

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