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Mutual funds: Truth vs. Imagination

Mutual funds are no longer a secret tool or way to spend that not many people know about. These days, it can be hard to figure out how to invest your savings. It is very easy for anyone to invest through mutual funds. At the same time, a lot of people in India don’t know much about money, which means they don’t have high hopes for investing in mutual funds.

Investing is a game of facts, data, and knowledge, but you need to be clear on your goals and have a good attitude about money before you start. Let’s look at about Mutual Funds Investments Expectation vs Reality and More.

Mutual Funds Investments Expectation vs Reality

Expectation: Mutual funds give investors the same amount of money back every year.

Reality: Mutual funds don’t always offer the same or steady results. Mutual fund websites usually show the return from the date the fund was opened, but that doesn’t mean it gives the same return every year. Depending on the market, mutual fund profits can be very low at times or very high at other times.

Expectation: SIP can only be done once a month.

Reality: Most people set up SIPs for mutual funds once a month, but they can also be set up every day, every three months, or even every six months. Most investors set up SIPs to run automatically because it makes investing easier and encourages them to keep saving. Investing every month is easier when you use SIPs to automate your investments. Investors can also set up SIPs to automatically pay at different times each month. The time between two SIPs is up to the user and depends on how easily they can get money to spend.

Expectation: The stock market is the same as mutual funds.

Most people who are just starting to trade think that mutual funds and the stock market are the same thing. You can buy and sell common shares on the stock market, but mutual funds are made up of

putting different amounts of money into different companies.

Expectation: There is no risk with mutual funds.

Many people think that mutual funds have no risk at all, which is not true. There are some risks, and one of the biggest ones is that you could lose money if your mutual fund has a lot of exposure to different parts of the market.

Stocks, bonds, and cash are all parts of mutual funds, but the amounts change from fund to fund. It depends on the kinds of assets that a mutual fund has how risky it is. There is more danger when it holds stocks and other investments that can go up and down.

The risk of large-cap funds is lower than the risk of small-cap funds because the value of large-cap funds doesn’t change as quickly. In the same way, bonds are safer than stocks because their value doesn’t change as much. People who hold cash are also likely to be very stable.

Multiple mutual funds will always give you a better return on your money.

Truth: Mutual funds are already a diverse investment, so buying more than one fund in the same area won’t help you spread. Putting money into more than one mutual fund doesn’t help spread the portfolio or make the returns higher. It can also work against the owner by lowering yields and adding stress to handling a lot of different mutual funds. Mutual fund returns are affected by market forces that are the same for all mutual funds.

Expectation: You need a lot of money to start investing in mutual funds.

Reality: There are still people who think that buying in mutual funds costs a lot of money. You don’t need a lot of money to start trading. All you need is the drive to make money and the will to spend. If you buy in mutual funds through SIP, you can start for as little as 100 rupees a month.

Before you start something new, you should always take a moment to remember what you already know. It helps you get better and plan ahead. Don’t set random goals when you first start spending; instead, focus on focused and smart investing.

The only reason for this blog is to teach, so don’t take it as personal advice. If you buy in a mutual fund, there are market risks. Carefully read all papers linked to the fund.

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Myths and Facts about Mutual Funds Investments