You must also hear from experts that Mutual Fund is a good option for investment, where returns are also good. At the same time, the risk is less compared to the stock market. But it is not necessary that everyone should understand the mutual fund market. Therefore, it is very important to know mutual funds before investing. This will help you in making investment decisions. Let us know what is a mutual fund is, how much is its category, how much return can be got. Also, know how you can invest in it.
What is Mutual Fund?
Mutual fund companies raise money from investors. They invest this money in assets like the stock market, bonds, and government securities. In return, it also charges fees from investors. There are many different mutual fund houses in the country that appoint fund managers to make investments. The fund manager has the good market knowledge, who understands and invests in such funds which have maximum returns. These companies earn commission from investors for investing in it. For those who do not know much about investing in the stock market, it is a good investment option. Investors can choose the scheme according to their financial goals.
How does it work?
Suppose you have to take 2 shares of PAGEIND, in which the price of one share is 30,000, so if you have Rs 30,000 then you will be able to take only one share. So for this, AMC launches a type of scheme, in which funds are collected from many investors, and then to invest that money in the stock market, AMC hires a stock market expert, which we call it. Also known as a manager.
This mutual fund manager invests your money in many companies after doing a lot of research. Due to which a small amount of your money is invested in many companies so that even if the price of shares of some companies falls, there is no effect on your money invested elsewhere. That is, the recovery of the lost money can be done.
In this, the more long-term Mutual fund you buy, the better return you get. Because inflation also increases with time. Due to this the price of the stocks increases and you get a good return. The risk in this is negligible.
In this, even if you have selected a very bad scheme, still you definitely get a 15-20% minimum return. Which is better than FD (Fixed Deposit) done in the bank.