Yes today it is the age of alternate funds. Gone are the days when you can get lumpsum from only conventional fixed deposits and recurring deposits. Interest rates are now all time low.
Here comes the role of Mutual Funds. What is it? These are part of shares of several companies clubbed together in different proportions to create a single unit called NAV. This net asset value will determine your Mutual Fund health.
That means if the nav increases your mutual fund increases and the oppsosite respectively. So how will my NAV increase? The companies comprising your fund will determine it. If more of the companies makes profit then you will be profited. The loosing companies will also impact the NAV negatively.
Here comes study. You just can’t do anything with your eyes shut. You need to do a background check of you fund manager or your mutual fund company. You need to check which companies are enlisted in your fund and to what percentage. You need to know if these companies have better future or not.
That simply means you need to be informed. Today information is money. The more information you can gather in the shortest period will multiply your chances of profit making.
But if you just invest without knowing anything about your fund you are taking 50/50 chance. Then you should not blame the game if you loose your money.
Although today different financial institutions are fooling uninformed persons into buying any fund they get better commission. This should never happen.
You may also buy Mutual Fund through SIP plans which are a great way to invest. I will share details about SIP in a different Tips or Review on Finance. Keep following me.
Today life is tough. So get informed and stay happy.