Investing money can be an overwhelming task. We have all been surrounded by complicated conversations about market fluctuations and asterisk conditions that we block out after the first sentence. But as we slog for hours to earn enough to sustain ourselves, investments give us a chance to make sure our money is doing the same for us! A capital way to make sure your money is growing independently is to look into mutual funds!
Monika Halan, editor at Outlook Money and consulting editor at The Mint, gives us a glimpse into the world of Mutual Funds –
Why are Mutual Funds so popular?
In a seller’s market, the customer has no choice but to purchase what is given to him. But mutual funds customise your investment according to your tastes and diversifies it with debt, equity and gold.
Can you trust Mutual Funds?
For many, investing can be speculative and unsure as a process as your money is moving in circles that you do not personally supervise, controlled by people you do not necessarily know. It gets even scarier when it is Mutual Funds because you have increased the number of places your money is being sent. So, why should you consider investing in it?
First, it is your money and you are entitled to ask how many ever questions you wish to before you invest. Second, the process of costing for mutual funds has been made very transparent for this very reason – regulators in ‘09 removed commissions that cut into the actual amount invested and you can be sure that all the money going in will be working for you, exclusively.
What returns can one expect?
Like all other investments, the safer the product, the lower the return. Mutual funds do project 11-12% in the large cap genre, but these are linked to the market and do not come with the guarantee that other investments provide. However, you do have the option to look at multiple sets of mutual funds and analyse the market return projected – make an informed decision!