Mutual funds are the most convenient mode of investment even for those who are new to investing.
The few main reasons to start investing in a mutual fund are :
When one invests in stocks, there is a lot of research required before and one also needs to put in a lot of time and efforts. With mutual funds, there is minimal paper work and is thus convenient in a lot of ways. With online platforms these days, you can buy a mutual fund as easy as it is to purchase flight tickets! You can simply visit your broker's website online and place your order. Furthermore, you can also easily transfer your funds from one mutual fund to another.
- Easy diversification:
When you invest in mutual funds your risks are diversified. How? Let's say one of the funds that you have purchased drops low in the market. However, your overall investment is not affected because you have invested in other funds as well. Purchasing stocks of different companies diversifies the risk.
- Provides access to inaccessible assets:
With mutual funds, you can invest with an amount as low as Rs.100. Thus, even if you do not have the capital to purchase a single stock, mutual fund enables you to do so.
- Well regulated and transparent:
Mutual funds are government regulated so you need not worry about anybody taking away your money and running away. The entire process is transparent and done with legality.
- Professional management:
A team of professional managers and researchers manage mutual funds. These fund managers handle your investments professionally and help you take proper investment decisions.