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Everyone is well aware of the mutual fund investments and their benefits when it comes to providing higher profits through diversification. The investors all across the country find mutual fund one of the most promising mutual fund avenues. But still, there are some investors who have certain doubts in mind regarding the same.
Here we have elaborated the five most common myths about mutual fund investing which must never be considered by the investors prior to taking a decision of investment.
One Needs to Be an Expert for Investing in Mutual Funds Many investors avoid the MF concept because they don’t understand the basics of mutual funds. They even believe that one has to be an expert before betting their money in different funds. But this is certainly not true. Mutual Funds are the best alternatives for the investors who don't understand investing at all. The reason being is that under MFs the investments are managed by professional experts and fund managers, and the investors need not have to worry about how to pick stocks or when to buy and sell them. The fund manager undertakes the responsibility to do all the research and analysis.
You Need to Have a Huge Amount to Start Investing The second most common myth among the investors is that they require a big amount of money for investments in mutual funds. This can be well explained with the help of taking the concept of SIP(Systematic Investment Plan). It is a way of investing in mutual funds as per which the investors need to put a small amount of money that can be even Rs.500 on a regular interval. Hence, keeping this myth in mind is not beneficial for the investors at all and SIP is the way to their concern.
Mutual Funds Have Equity Investments Only This is another common myth among people that mutual fund invests only in equity stocks and shares. Instead, the funds have been classified into three broad categories, viz., debt, equity and hybrid. As per this, the fund houses make investments in various investments avenues, securities and instruments to fulfil the requirements and provide with the best solutions. The investors having capital appreciation as their goal of investing can go for equity, while those desiring financial stability can opt for debt mutual funds. Hybrid funds on the flip side, provide the benefits of both equity and debts in a balanced way on a simultaneous basis.
Thus, investors having negative thoughts about mutual fund investments and want to gain high knowledge on the same must have realised that mutual funds are beneficial for every investor. The myths among the people must not be considered as the decision criterion for investing in MFs. Rather, one must consult an advisor for the same.
There are various online mutual fund investment platforms which provide free of cost advisory services to the investors, MySIPonline is one of the leading platforms and can help you the most in making the best mutual fund investment in India.