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Mutual funds are generally safer than the stock market, as they offer a degree of risk mitigation through diversification.
Mutual Funds start as low as Rs 100 per month. (Representative Image)
Investing in the stock market can be quite daunting sometimes, but investing in mutual funds is a stress-free way to grow your wealth. Mutual funds are generally safer than the stock market, as they offer a degree of risk mitigation through diversification. Another benefit of mutual funds is that one can start investing with a monthly Systematic Investment Plan (SIP) starting at as low as Rs 100 per month. With this, individuals can create future wealth, invest in property or plan children’s higher education or their retirement.
Now, the most important question arises: How to invest in mutual funds? In this article, check the step-by-step guide to start investing and grow your money.
How To Invest In Mutual Funds?
You can start investing in mutual funds through various modes like lump sum or Systematic Investment Plan (SIP).
Lump Sum: The investor can put the entire amount at once. This investment is suitable for those who have a big sum available and want to take advantage of market opportunities.
Systematic Investment Plan (SIP): By investing through SIPs, you can make small, regular monthly investments. It helps in averaging the cost and is suitable for salaried individuals.
Types of Mutual Funds
Mutual funds are divided into three types: equity, debt and hybrid funds.
Equity Funds: These funds are investment vehicles that primarily hold stocks or equities of publicly traded corporations. They gather funds from different investors to buy a diverse portfolio of stocks, with the purpose of generating long-term capital growth and returns.
Debt Funds: Investing in debt funds helps you collect funds from numerous investors and put them in debt instruments such as government securities, bonds, and other fixed-income assets. Categories are based on maturity or duration, like liquid, ultra-short duration, low duration, money market, short duration, medium to long duration, and long duration.
Hybrid Funds: These funds diversify by owning multiple asset classes, often a combination of stocks (equity), bonds (fixed income) or real estate investment trusts within a single fund. Aimed at income and capital appreciation, hybrid funds provide the advantage of asset allocation, spreading investment risk.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
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Delhi, India, India
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