Why Long Term Investing in Mutual funds is best for Future Investment?
Making an investment decision is the toughest part of an investor’s life because lots of queries arise on investor’s mind while choosing the right product for investment. However, investment on mutual fund assures better return to the investor after maturity. Investment in Mutual fund is an innovative approach to retain maximum benefit against inflation. Long –run investment in mutual funds always give best benefits and returns to its follower.
What are mutual funds?
Mutual funds can be considered as a financial security tool that pools the money of investors & invests them in exchanges like stocks, shares, bonds etc. Each investor in a mutual fund investment scheme holds a portion of the scheme that represents his or her investment on purchasing the units of the fund. Mutual funds are governed & processed by asset management companies (AMCs) and the investments of the investors are processed under securities act of that particular scheme.
How Long Term Investment is better than Short term investment?
- Long term investments are specially designed keeping the financial objectives of investors in mind. Long term investment gives option to investors to invest small amounts on monthly, quarterly, half-yearly or yearly basis that gives healthy returns to investors when the policy gets mature. On the other hand, short term investment runs under market risk and may give less return than investment amount to the investor.
- Rate of returns in the long term investment on mutual funds like SIP (Systematic Investment Plan) are processed comparatively under minimum market risk as it believes in giving stable returns to the investor. Financial Advisor suggests best plans for investment to the investor which can give utmost profitable return after the maturity of plan.
- Investors who’re indulged in long- run investments can receive tax benefits on all mutual funds. Such provisions of tax benefits are rarely found in short term investment plan.
- The securities involved in long term investment on mutual funds includes commodities, equities, debts and gold funds are processed under lesser risk than investment in an individual stock. Mutual funds are subjected to unsystematic risks such as company risk and sector risk while stocks are subjected to company risk, sector risk as well as market risk which make it more volatile in the market.
- Mutual funds works with the pooling of investors money. Here investors needed a small capital outlay to builds a diversified portfolio of stocks. In long run investment, investors can buy units of diversified equity funds by investing just 5000 inr (or even less) in short term investment, needs a large capital outlay for ownership of a diversified portfolio of stocks and exchanges.
- Financial Advisor suggests varieties of products on mutual funds for an investor to invest that can help you to achieve your financial objectives. Here you can invest on equities as well as on other products like liquid funds, income funds, monthly income plan and balanced funds. It offers a disciplined approach of investments and savings to mutual fund investor.
Mr. Ajay Kumar Jain, M.Sc, Chairman And Managing Director
Being the Chairman And Managing Director, he focuses on holistic investment planning and wealth management and tries to make investment planning simpler for retail and HNI investors. Investor education is one of the prime things that Mr. Ajay Jain focuses on as he believes financial education is the foundation of successful investing. With over two decades of experience, Mr. Jain has made a mark in the Indian mutual fund industry due to his compassion and sheer hard work.