Mutual Fund investment has tough the new height in the present era. Many people are enjoying the concept of mutual funds and are investing heavily in this. The question arises that why invest in mutual funds when you have some many options available?
Why Mutual Fund is Different from Other Saving Options?
Mutual fund investment provides you diversified platform. Your investment is guided by professional investors which assure safety and profitability to your investment. It has better returns than the other investments.
Reasons to Invest in Mutual Funds:
- A small amount of capital can be invested in different companies. This allows you to reap better returns while investing small amount.
- Your fund is professionally managed by people who have acquired specific expertise in mutual fund investment.
- It reduces risk by spreading it. As mutual fund is invested in a diversified way therefore the risk gets divided and reduced.
- All mutual fund industry comes under the purview of SEBI which makes it much more safe and accountable.
- Mutual fund schemes are easy to compare and are more transparent than the other investing options.
- Mutual funds allow wide variety of choices for the investor before he/she invests in any particular scheme.
- SIP schemes in mutual funds help you channelize your monthly savings wherein you replace your recurring deposit scheme with an SIP (Systematic Investment Plan) mutual fund plan.
Tax Benefits under the Scheme:
It is very easy to figure out which mutual fund is eligible under section 80C deduction. Most of the ELSS schemes offer tax benefits when you invest in mutual funds while simple equity oriented funds do not offer any tax benefits. Therefore it is necessary to check before you invest as most investors go for investment to get rid of taxes. Also, as per the current provisions of the Income Tax Act, if you trade in equity oriented mutual funds for long term then the return on investment becomes taxfree similar to long term equity share trading .
Why Experts Invest in Mutual Funds?
Mutual funds have no fixed returns therefore they are always volatile and a normal salaried person finds it risky to invest in mutual funds. Although there are debt oriented funds wherein you receive guaranteed return but lesser amount of risk fetches you less return. Mutual funds are subject to market risks therefore it requires professionals to monitor. While investing in mutual funds, one requires paying expenses and mutual fund fees. Also, you need to pay to the professionals looking after your investment. The bigger part here is that it has no predictable income therefore only experts who have better understanding in mutual funds invest here. Why loose money and time in stock markets when you have professionals available to manage your portfolio.
Why Experts are Bullish on Mutual Fund returns?
Size of the mutual fund market and the Indian stock market is increasing day by day. More than 8 thousand crores of investment is coming in SIP market every year. If you compare the Sensex or Nifty historical charts you would see that the moving average is increasing YoY therefore, getting good returns on your investment is possible to a great extent. Sensex is currently trading above 29000 level and Nifty above 9000 level. Every increase in the index price will assure better results on your investments.