Are you looking to merely save money or invest it over a period of time? Mutual funds are definitely a sahi choice for you. So, basically, a mutual fund is something that you and the company you have invested in together along with the pool of investors But hey, this comes with a little risk of losses. If you’ve noticed the adverts, you’ve probably had a glimpse of the last page where a person narrates to you that mutual fund investments are subjected to market risks. But also, what’s life without a little risk now, isn’t it? Since mutual fund is a pool full of investors, whatever the gains or losses are, you share it with the rest of the investors proportionately depending on how much you have invested. The money that you have invested in mutual funds are diversified and spread over to a large number of bodies at the same time. So, if there is any fluctuation in one body out of the several others it won’t cause as much effect as it would have if all your funds were directed towards one making the losses (if there are any) a little more satisfactory.
All of this investing and gains, one can do it on their own, but there’s always a need to continuously monitor the market changes and to keep track of the gains, also decide when to sell or buy. So, mutual funds are helpful in this aspect. They have a lot of trained professionals who can help monitor, buy and sell for you. They also believe in diversification as we have already discussed. These types of funds turn out to be beneficial.
An equity fund is a type of mutual fund that concentrates primarily on stocks. Therefore, equity funds are also called stock mutual funds. Equity funds are referred to as funds for all and are the most popular type of mutual funds available. It helps an investor by not burdening him with a large investment of capital. These equity funds are taken care of by professional money managers who put in lots of effort in reducing the risk and losses associated with heavy capital investment. There is better diversification and lesser risk. Therefore, equity funds are also called ideal investment vehicles. Since the amount to be invested is not a large sum, it encourages small capital investors and helps them in investing in a right way. However, equity funds are categorised based on size, style and location of the companies.
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