SIP/ MUTUAL FUND

Introduction

If you find investing to be easy and affordable, think twice. Mutual funds can help you diversify your money across a number of investments, enabling you to tap into the diversity of opportunities out there. This article really focuses on the issue of how to buy and sell mutual funds, which might be critical if, relatively speaking, you’re new at this or have a fair amount of experience by now. As we go along in this guide, we will tell you about a way that you will be able to pick the right fund and then place your trades with peace of mind. This is an investment company that acquires money from lots of investors and invests the money in many securities, like stocks, bonds, and short-term debt. The money a shareholder invests, along with its additional investment, can be withdrawn. While buying mutual funds, investors buy shares in the same. Each share represents part ownership and his part of its income.

Some steps of mutual funds:

⦁ Understand how mutual funds work.
⦁ Assess your objectives.
⦁ Perform research on mutual funds.
⦁ Selecting the Right Fund
⦁ Opening an Investment Account
⦁ Placing Your Buy Order
⦁ Monitoring Your Investments
⦁ Selling Mutual Funds

Why do people buy mutual funds

Mutual funds are a popular choice among investors because they generally offer the following features:

⦁ Professional Management. The fund managers research for you. They select the securities and monitor their performance.
⦁ Diversification or “Don’t put all your eggs in one basket.” Mutual funds usually invest in dozens to hundreds of different securities. The variations help guard against risk in the matter of the downfall of just one security.
⦁ Affordability. Many mutual funds require only a small minimum dollar investment, but there might be a limit set on purchase amounts that need to be made and maintained in a fund prospectus.
⦁ Liquidity. The investor through mutual fund schemes can redeem his shares at any time, and he would get the current NAV (net asset value) along with applicable entry or exit loads.

Type of Mutual Funds

The broad types of mutual funds typically fall under four large categories: money market funds, bond funds, stock funds, and target date funds. Each category has different features and varied risks and rewards, as explained below.
⦁ Money Market Funds
⦁ Bond Funds
⦁ Stock Funds