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Mutual Fund is a buzzword in day to day life of a common man.It is said to be the most convenient way of investing regularly in the markets. Systematic Investment Plan SIP is a tool which takes care of risk associated with the financial markets. There are so many different types of mutual funds available in the markets which suits to each and every category of investors. It is supposed to be the most preferred way of creating wealth over a longer period of time. Mutual Funds provide wide variety of options to the investors to put their money equity or debt instruments or shorter or longer time frames. Now it is the choice of the investors to choose any of the available based on its own risk appetite, availability of funds and the behavioural pattern or the historical performance of a particular fund.
A mutual fund is a trust that pools investments and savings from general public who may share a common financial goal of maximizing their wealth.The funds are pooled then collectively invested by well qualified and experienced Fund Managers in different types of securities ranging from equities, debt, debentures to derivatives; depending upon the objectives declared in the schemes.Anyone with an available surplus or an intention of saving few hundred rupees on a monthly basis can invest in Mutual Funds.
There are different sort of schemes that enable investors or savers to put money into the funds regularly on monthly basis through SIP or one time investment basis.It gives returns that are based on market performance and not assured returns, as in longer-term market returns may have potential to perform better than assured return or fixed income products.
Mutual fund provide a great opportunity to the retail investor as they are not well equipped to handle the turbulence of the market. Diversification, transparency, liquidity, flexibility and tax benefits are the important features of any mutual fund schemes.
If one stay invested through SIP route for a long period of time with the professional fund manager then the power of compounding comes in to picture, which in turns leads to enormous wealth.
