Why investing in mutual funds is not a bad idea?


While choosing an investment product you could be spoilt for choices. The market is flooded with a variety of options and the choice becomes a difficult task. Every product does have its own positives and negatives. But in case if you are exploring the choice of a product that offers diversification, and professional managed trade off then mutual funds are an obvious choice. As per mutual fund blog investing in mutual fund could serve out to be a wise move in certain cases.

mutual funds

Why make a move towards investing in mutual funds?


The first major benefit that mutual fund offers you is diversification. You would not be having a lot of money to diversify your investments in stocks or other trade investments. When your pool your money from various investment   sources it streamlines your risk. The chances are pretty rare that all the stocks would fall down on a particular day. By  doing so you do not end up keeping all your eggs in a single basket and end up making bad investment decisions.

Professional management

By investing in mutual funds you provide professional expertise to your investments. AMCs go on to provide you with qualified managers who by their own expertise and inputs of a strong research team go on to choose the best mutual funds as per your investment objectives. This saves the time and even effort of monitoring your investments and figuring out whether you have gone on to make the correct investment decisions or not. In the case of mutual funds there is no need to worry about market swings.


Ideally you do not want to cough by large number of shares of a prominent company or even invest too much in a particular sector.  If you still have the money investing in mutual funds is an obvious choice. In fact you can start with a small amount and this could be even rupees 500 via a SIP.

The best part about mutual fund investment is the liquidity it offers. It is fairly easy to move the money out of mutual funds at any point of time. In case if you invest in open ended funds it can be redeemed in whole or as a part at any point of time to receive value of the funds.

Tax benefits

Various benefits arise in terms of tax when you end up investing in mutual funds. For example any investment in ELSS funds qualifies for tax exemption under section 80 C of the Income tax act. No tax on capital gains arise if you hold on any equity related schemes for more than 12 months.

There are various forms of equity related schemes that fall under the category of debt category in terms of tax purposes.

To sum it up the market of mutual funds is a well regulated one. The funds are regulated as per guidelines specified by SEBI.  All the funds are needed to follow a transparent process, which is specified by SEBI for the benefit of investors.

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