Many uninformed people tend to shy away from investing in mutual funds due to these exact myths. They do not realize that mutual funds help in building a better financial future and fulfilling different life goals.
Here we have put together some common myths related to mutual funds that often stop people from understanding the true potential of this financial instrument.
Large Amount of money is needed for mutual fund investment
This is a common myth associated with mutual fund investment. Many investors think they need to have a big bank balance to invest in them. However, this is far from the truth. Today, you can fix a monthly payment plan rather than doing a one time investment to utilize the compounding power of money and build a healthy return for yourself.
You need to be an expert to invest
Mutual funds are a simple investment tool involving no rocket science. Any and every person looking to earn good rewards can choose it. However, there are different types of mutual fund policies that are available in the market and can be chosen depending upon your risk appetite and investment goals.
Mutual Funds should be let go in difficult situations
This is a very prevalent myth which is completely false. Monthly payments for the mutual funds should be continued throughout the term so as to get best results. Inspite of any difficult circumstance and market slowdowns, you should always stay invested. This is because mutual funds are a long term investment and any short term risks and problems are often covered up in this period.
Best performing schemes give best returns
The ratings and earnings of mutual funds are dynamic based on the scheme’s performance over a certain period of time including market fluctuations. The best mutual fund policy of this month may not be able to maintain the same rating the next month. However, ratings and earnings are a good way to shortlist the scheme you want to invest in. They should then be tracked to evaluate their overall performance.
Funds in Mutual Funds are always at risk
Though the markets show some volatility on an everyday basis, mutual funds are not completely based on them. There are certain funds that are also included in mutual funds that are safe alternatives like government securities, corporate bonds and market securities. Choose a diverse investment portfolio so as to achieve the desired financial objective.
If you are still confused regarding whether mutual funds investments are the right choice for you or not, contact our financial experts. They will help you in understanding the mutual fund market better by busting some myths like the ones stated above and help you in building a smart portfolio.