Why mutual funds are good? Why should someone completely new to mutual funds start their investment journey? How much money can you invest based on your income? Which mutual fund should I invest in?

Why mutual funds are good?

Mutual fund investment is the first place from here you can learn a lot about investment and the risk is low. So, every person’s investment journey should start with mutual funds.

For those who know nothing about investments, investing in mutual funds or SIPs is very easy, and you can get good returns. Although SIP and Mutual funds are different concepts, the two are related in the same way. There are two mediums of investment for those who invest: the share market and mutual funds, but for those who are new, mutual funds are the best.

Why should someone completely new to mutual funds start their investment journey?

Those who are successful know how to make a profit when they invest. But those who don’t have experience have no idea how to make a profit or how to invest their capital. In that case, if you hand over your capital to a company, that company will invest it through its experienced people.

Because they know which companies will be profitable in the future if they invest in them. These companies are called asset management companies, they manage your assets.

Those who invest your money are called asset managers. Many people like you give their assets to a company to invest, and the company pools all their funds together to form a mutual fund the asset management company invests that mutual fund in various sectors to bring you profits, and in return, they also take some dividends, this is the part that was taken, the money is called the expense ratio. It is better to invest in a fund with a lower expense ratio.

Asset management companies name:

UTI mutual fund

SBI mutual fund

HDFC mutual fund

Now we have to remember that if we hand over 1lakh rupees to this asset management company, that process is called a lump sum. For those who think that instead of giving money in one month, I will give it month by month, like investing money in this systematic way at the right time, the right amount every month is called SIP (systematic investment plan).

How much money can you invest based on your income?

A person should invest 20% of their income. For example, if a person’s income is 15 thousand, then he can invest 3 thousand in Sip. You should invest in a Sip with a long-term perspective, then you will get good returns. Minimum invests 1500 hundred, you can get good returns otherwise you don’t get good returns.

Which mutual fund should I invest in?

When we choose a mutual fund, we are given the option of large companies, mid companies, and small companies. These companies will be divided according to the rules of SEBI (Securities and Exchange Board of India) so that when investing, they can be sure which company they are investing in.

Large companies: large companies are very big, their ups and downs are not visible, and the risk is very low, but the returns are not very high.

Mid companies: mid companies have very high returns and high risk. These companies are on the growth side. They may become large companies in the future, but their ups and downs are very high.

Small companies: the most fun thing about small companies is the return. The returns are high and the risks are also very high. They have a lot of ups and downs.

Conclusion:

Beginners can keep nifty 50 index funds on their priority list in their first investment journey apart from these investments can be made through various applications, and each application has SEBI approved. A person can invest digitally by opening a Demat account at home, many people may wonder what will happen to their money if the app is shut down, in that case, your money is with the asset management company, and you can contact the company directly.