Mutual fund investments are recommended by investment analysts to both aggressive as well as conservative investors. To give a direct and short answer to whether mutual funds are a good investment or not: yes, mutual funds have been a safe investment option than direct equity investments, right from their origin several years ago. However, apart from what your investment adviser has to say, you would be eager to know why they are a good investment option. Let us discuss below the features of mutual funds that make them ideal for investment.
Safety
As mentioned above, mutual funds are a good investment option because of their safety. The chances of losing your money are minimized to a great extent with the help of mutual funds. So, the process of wealth creation can be completed with a good speed, and in a successful way.
Professionally Managed
Mutual funds are professionally managed investments. All mutual fund companies have fund managers who are highly qualified finance professionals. With innovative and advanced strategies and deep knowledge of the capital markets, fund managers are able to meet investor expectations and even surpass them.
Consistent Returns
Their consistency in giving positive returns to investors is noteworthy. Proper risk management by fund managers ensures that mutual fund investors do not make losses like direct equity investors. Top rated mutual funds can give you a return of anything between 15-30% per year depending on the market conditions. Do mutual funds pay dividends? This is another commonly asked question. As per the available information, most reputed funds pay attractive dividends, thus increasing wealth of their clients.
Flexibility
The flexibility offered by mutual funds makes them one of the finest asset class. Mutual funds of different types are available for big, as well as small investors. You can choose from the various large-cap, mid-cap as well as small cap funds as per your choice and preference. The mutual funds give you a chance to invest as per your risk taking ability and term of investment. You can sign up with a mutual fund company and make monthly payments, which is the best payment mode for salaried people.
No Need to Track Your Investments
In the case of mutual funds, you need not track your investments on a daily basis like direct stock investments. Your company manages your investments very well and hence you can save a lot of time and energy.
While discussing whether mutual funds are a good investment, we need to compare them with stock investments. Many times, stocks can give higher return than funds if the investor has a thorough knowledge of what he is doing in the market. A good stock investor can earn around 30-60% return on his investments in a year depending on his level of expertise. All these factors highlight why mutual finds are a good option to invest one's money in.
DISCLAIMER: This article is just for reference purposes and does not recommend any investments
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