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All you need to know about Mutual Funds as a first time Investor.

Do you plan to buy that car? Or own a house of your own? Would you like to send your child abroad higher for education? Do you dream of living the life you want to after your retirement? Mutual funds will bridge the gap between you and your financial goals. Mutual funds are investment pools formed by collecting money from multiple investors and then utilizing these funds by using them to invest in securities like debts, bonds, stocks, and many other assets. These investments are handled by professionals who have developed skills and perspectives on the functioning and all the different aspects of investment markets. Once you have done with your investment, you can depend on your financial advisor to take care of the rest for you. Earlier the entire procedure of mutual fund investments was a long and tedious one, but now that the power of digitization is taking over, mutual funds have become more accessible as the whole process can now be carried out with a few clicks. There are many financial consultants in Mumbai and in other cities of Maharashtra operating online.

The first thing that you need to determine if your financial goal if you do not have one already, once you have decided your plans and goals, looking at different schemes and the different categories of mutual funds is the next thing to do after deciding the goal, this will help you become more aware of the mutual fund market and its many aspects. Different schemes and securities fulfill different needs, while debt mutual funds give faster yet lower returns, equity mutual funds fetch higher returns although they have a tendency of fluctuating more in the short term, they are usually meant for a time period of five years or more. All Mutual Funds offer a direct as well as a regular plan; they are not very different from each other. One basic difference is that annual expenses in a direct plan are lower by around 0.75-1% per annum as compared to equity funds. While a direct plan may save you some money, but it will make you do all the work an expert would otherwise do for you and your investment. A direct plan may not be highly recommended by many people because it is always essential to have expert guidance and insights when it comes to investments.

Investing in mutual funds is convenient as it is now a paperless procedure in which you can monitor the market and invest accordingly. The fact that you do not need a lot of money to commence a mutual fund investment is a significant factor that makes it an ideal investment option for people. Flexibility is another factor as you have the option of investing a lump sum amount or following a SIP (Systematic Investment Plan), SIP schemes start from amounts as low as 500 INR so your budget or expenses can never be a big concern for you. Tax saving is another factor that makes Mutual Fund stand out when it comes to investment options; ELSS provides tax deductions on specific financial instruments as per section 80C. And last but not the least, online platforms and professional fund managers who will guide you through every step in your investment journey contribute immensely to Mutual Funds being the perfect option for first-time investors.

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