For an investor who is seeking better returns then fixed deposits/bonds and who is not well equipped to explore stock markets directly , mutual funds is an effective option Mutual funds also offer diversification as the investments are spread over different companies across sectors. The funds are entrusted to a professional fund returns. Mutual fund can be started with an investment as low as Rs.500 per month.
Systematic Investment Plan (SIP) :
The best way to invest in mutual funds is through systematic investment plans. A fixed amount can be paid monthly/quarterly to the fund of your choice. This practice of Systematic investing inculcates in the investor a financial discipline.
And the process of investing regularly fetches the advantage of rupee cost Averaging. This in turn ensures that they purchase more shares of an investment when the prices are low and less when they are high.
Investing through Exchange Platform :
This method allows investing in mutual funds using the Demat Acoountlike purchasing shares. It is easy, less troublesome and a paperless way to invest and manage mutual funds holdings. It provides the flexibility to monitor investments remotely and also provide a single and consolidated view of all the financial products. Additionally, it saves the time spent on know your customer (KYC) formalities for every investment.
