Here we will discuss about what are Mutual funds, how to manage and how long we should invest.
For most people,mutual fund can seem complicated or intimidating .
But,here we can explain to you about mutual funds in a very basic manner.
Basically,mutual funds are the most common investment options available to the common man as it offers them to invest in diversified sector at desired costs.
What are mutual funds?
The money pooled by a large number of people (investors) make mutual fund.
Thepeople investing in are of common investment goals.
Then,it invests the money in bonds, money market instruments and other equities.
Each investor holds units which represents the portions of their holdings.
The income of gains that are earned are proportionally and distribute among the portion holders.
How to manage an account in mutual funds?
People are managing their account personally or with the help of management companies.
If you don’t know how to manage invest your money in it.
The best way to hire a professional to do this work for you at minimum commission rates.
People generally given the charge of various functions depending upon their education , experience and skills.
What are the basic formalities you need to complete before investing in mutual funds?
Prior to investing in a mutual fund ,you need to complete the Know Your Customer (KYC) process.
We should do this at the time of submission of scheme application form.
The scheme application form contains detailed information about banks, PAN, accounts and account holders which should be filled carefully.
This can be carried at anywhere whether it’s AMC Asset Management Company or at authorised point of acceptance.
For how long one should invest in mutual funds?
Every investor us worried about the time horizon in which a investor intended to stay invested.
The decision of how long generally depends on the investment goal.
Investorsneed to periodically review investment status and progress.
Duringthis ,other options like switching and redeem are also available.
Written By – Deepak Kumar ( Senior Analyst)
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