Mutual Fund SIP | These three types of people should not invest in mutual funds, your money will be lost.
Mutual Fund SIP Mutual funds have become one of the most popular schemes today and behind it are all the features of mutual funds. Its first advantage is that even people with low income can invest in this scheme because it can start with just Rs 500 while investment in SIP can be increased as the income increases. You can invest any amount in mutual funds and start any number of SIPs at the same time. If you want to make a big fund from a small investment, then mutual funds are very profitable schemes and give returns of at least 12%, which is higher than any plan. Also, due to the benefit of compounding, mutual fund schemes can provide better funding in the long run.
Therefore do not invest in mutual funds
If you have not yet invested in any mutual fund and are planning to do so, then you should understand some other things related to mutual funds better. Also, be prepared to take some risk before investing as mutual fund schemes are market linked and there is no guarantee of returns. Here's all you need to know about three types of people who should avoid investing in mutual funds.
If you are not willing to pay additional fees
To handle your investments, your investment is taken as the expense ratio. The AMC, i.e. Asset Management Company, bears the cost of fund distribution and marketing. Apart from this, the AMC also bears the transfer, legal and auditing costs of the mutual fund. All such expenses are recovered from the investors purchasing units of the mutual fund. Note that the expense ratio is not measured at the same time, but fund houses calculate their daily expenses and then calculate it daily. The amount of annual expenses is divided by the trading days of the year which are applied to the total NV. The expense ratio shows how much your mutual fund management is charging your investment portfolio.
If you do not want to invest for a long time
It is not that you cannot invest in mutual funds for short term, but if you want to build a bigger fund, you should invest for a longer period. Most financial experts say that when you invest in mutual funds for a long time, you benefit a lot from cyclical growth and can easily build wealth. In such a situation, if you cannot invest for a long time, then you can look for another option instead of mutual funds.
If you don't want to pay taxes
You get income tax exemption on investing in any other fund, but this is not the case with mutual funds. There is tax on mutual fund returns, which reduces your profits by a few percent. Do not invest in mutual funds if you are not ready for it, however, ELSS mutual fund scheme does include tax benefits.
Disclaimer : Investing in mutual funds and stock market is based on risk. Before investing in the stock market, definitely consult your financial advisor. tezzbuzz.com will not be responsible for any financial loss.
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