If you suffer anxiety about investing in the Mutual funds ,consider these 10 compelling reasons why you should invest in mutual funds.
- Selection of funds:- We can select the suitable one from thousand of funds that suit our needs and get information on them easily.
- Always start with a small: Most mutual funds let us to start with less than $1000. If we set it up for automatic deposits, then some will let to start with only $50.
- Simplicity:- We have to deposit only 10% of our income every month. So, just pay for yourself first, then pay the mortgage and after that pay everyone else.
- Professional management: Professional managers are there to research, select and monitor individual stocks. A good fund manager will makes us rich.
- Compound Interest: Depending on the selection of index, the US stock market has gone up with an average of over 12% per year for the past 10 years, and it has been almost high for the past 20 years. The market fluctuates but the good thing is over many years, system works every time.
- Dollar cost averaging : Since the details are complicated but by investment of every single month, whether the market is up or down, we get a tremendous boost. Our average cost will always be less than the average price that we paid and that comes as money in our pocket.
- Diversification: A broad based growth fund typically invests in thousands of companies in different industries, sometimes also in different countries around all over the world. If one stock goes down, then hopefully dozens of other stocks goes up. There is an excellent protection and also risk management built-in to these funds.
- Specialization: If we do research in the market, then we find that there are funds that invest only in a small number of companies. If we can accept the additional risk, so we can invest in one particular industry or in companies of a certain size or that are environmentally responsible in nature. This specialization offers us with the potential even for greater profits, but it can also bring greater potential risk.
- Families of Fund: Most mutual funds are generally offered by management companies that sponsor several different funds having different objectives. This makes it easier to move our money between funds, so as our goals change, we can adjust our investments with a quick phone call or on the Internet.
- Momentum: Once we get started, our enthusiasm builds. Once we have money in the market, we will track it, manage it and in all respects, our desire to save will increase. If we have had a difficulty saving in the past, those monthly statements will be positive reminders to do even more.
How You can invest in Mutual Funds?
You can invest in any mutual fund either online or offline. As online, you can go through online investment facility provided by the AMCs and as offline, you can go through any financial intermediary or directly going in any branch of the Mutual Fund Company. Financial intermediaries are the banks, brokerage houses or third party distributors or Individual Financial Advisors (IFAs).
There are few steps that you follow while investing in mutual funds. Whether you decide to invest offline or online, you are required to have the following documents:
Photograph, PAN Card, Name & Address proof, Bank Account details and KYC compliances.
There are various channels by which you can invest in Mutual Funds:
- Investing online through online platform
Step 1: Visit the website and register for the online transaction services. Provide your necessary information, i.e. your Folio number, email id and mobile number registered with the folio, etc.
Step 2: The F-Pin has been generated and sent to you on your email id and on mobile registered in that folio.
Step 3: Using this F-Pin, you can also create your own User ID and Password.
Step 4: Login by using these credentials just created and start investing.
- Investing offline through an application form
Step 1: Contact a distributor.
Step 2: Get an application form from the distributor.
Step 3: Fill up an application form by providing your necessary information, i.e. your Name & Address, PAN, email id, mobile number, etc. This email id and mobile number are used for further communication and also used to register for online transaction services.
Step 4: Attached the copies of all the relevant documents and submit it along with a cheque or demand draft for the purpose of amount of investment.
Step 5: If applied through an agent or distributor, then they submit the application form with the cheque and all the relevant documents to the mutual fund based company.
Step 6: The mutual fund company then allocates you with a folio number for the particular investment and issue an Account statement.
- Investing through mobile
With the advancement in technology, new android devices like smart phones and tablets are being used for doing transactions. M-Easy is such mobile investment facility which helps you to Invest, Redeem and Switch from one scheme to another with the help of an SMS. With the help of m-Easy, you can easily manage your investments from any place.
Hope you like this ! Happy Investing!!!
Your Money Adviser