3) will affect the investors capital or income

3)         If I am not
planning to invest in Fixed Deposits (FD) scheme, and I will preferred Mutual Funds
(MFs) also known as Unit Trust. Mutual fund is an investment made up of a group
money being collected from different investors for the purpose of investing in
securities and legal team or organization such as stocks, bonds, money market
instruments and other asset. Mutual funds are operated by professional and
legal money managers, who help the investor allocate the fund’s investors. The
unit of share can be purchased or redeemed as needed the fund’s current net
asset value (NAV). NAVs keep changing according to the fund’s holdings which
derived by aggregating performance this will affect the investors capital or income
gain or loss.

            I choose
Mutual Funds (MFs) as my investment other than Fixed Deposits (FDs) is because
MFs have the potential to earn high returns where as FDs rates are unaffected.
To be an fund investor won’t get any product from the company, actually investor
are buying part ownership and asset from MFs company. Mutual Funds company are
selling government bonds, corporate bonds will get the pay of a fixed rate of
return.

In the terms of
risk, fixed deposits have minimal risk where mutual funds have the higher
market risk. But the risks can be mitigated to a certain extend mutual funds
are managed by professionals. Well mutual funds have the higher market risks,
it also means it get higher return as well. Next, the liquidity for mutual
funds are higher than fixed deposits because fixed deposits have a fixed time
period as the name suggests, and generally have low liquidity till the tenure
of the deposit ends. In case of premature withdrawals, fixed deposits holders
have to pay a penalty, and miss out on a portion of the expected
returns. MFs only charge an exit load if investments are withdrawn, in a very
short period, normally under a year. Some
MF Schemes offer high liquidity. Funds can be withdrawn at any given point of
time, without any exit load or extra charges.

Next,
some of the investors don’t have a lot of capital or cash but they still want
to buy the investment to earn income or gain. Investment costs are low for
Mutual Funds. These are the benefit to let those investors are not rich enough
or don’t have a large number of cash. Some investors will aspects that the
building or house are costing a lot of money from expense. The market price of
the building are depending on the brokerage firm, the price all are included
the charged commissions, up to hundred to thousand dollar. However, mutual
funds can be significantly less expensive. A mutual fund manager will place the
necessary trades to maintain the mutual fund portfolio but the investor may
only be responsible for one low expense. Sometimes investors will facing some
issues in investing become more expensive than buying individuals stock
securities. Mutual Funds investors are preferred to buy no-load mutual funds
with low expense ratios. Costs can also be minimized by investing with one of
the best no-load MFs companies like Vanguard Fidelity.

Variety for mutual funds today exist
with any number of various asset classes or strategies. This allows investors
to gain exposure to not only stocks and bonds but also commodities, foreign assets, and real estate through specialized mutual
funds. Some mutual funds are even structured to profit from a falling market
(known as bear funds). Mutual funds provide opportunities for foreign and domestic
investment that may not otherwise be directly accessible to ordinary investors.

Last but not least, investors can buy
many different types of mutual fund different types of mutual fund different
with fixed deposit are focused on only one investment. Mutual funds are
suitable for different condition investors which mean mutual fund have
different several choices. It help a lot of people to get investment such as
graduate student from university, retirement people and others. Mutual Funds
combine to be suitable for certain age range of investor, such as student
graduated from university are allowed to retire around age 40-50. Retirement people
generally considered a long term investment object. Next, as my opinion I like
then liquidity of mutual fund than fixed deposits. Because fixed deposits
company will have lock- in period as applicable to their investor. However it
choose to invest in mutual fund because of the premature mutual fund only
charged an exit load it investment are withdrawn in a short period normally
below 12 months. In case of premature withdrawal for fixed deposits have to pay
penalty and miss out on a portion of the expected returns.
            I
have conclude that if someone want making investment have to do some online
research or can get some opinion from employees from bank. These action will
help us to avoid from invest funds in wrong choices and it will affect
investors loss money.

            

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