Why Mutual Funds?
Mutual funds pool money from investors and in turn, reinvest it in different equity, debt and money market instruments. As your money is managed by professional fund managers, identifying profitable securities to invest in is effortless. Mutual fund returns are generally better when inflation is taken into consideration. By investing in different mutual funds- dedicated pension funds, long term income funds or even aggressive hybrid funds- that emphasize regular income and long term capital gains, you can build a retirement corpus that helps you live an independent lifestyle after retirement.
As a salaried employee, one of the easiest ways to invest in Mutual funds is through Systematic Investment Plan (SIP). It offers investors unmatched flexibility in terms of investing regularly and leverage securities that they may otherwise not be able to access, such as corporate real estate.
Benefits of investing in a mutual fund-
The performance of mutual funds depends entirely on market conditions. Depending on the fund manager’s investment strategy, your money may be invested in more than one asset class (equity, debts, money market instruments) which helps in reducing the risks involved. Even if market dynamics affect the performance of one asset class, a diversified portfolio can help you leverage other securities.
Unlike other investment instruments, mutual funds come with little or no lock-in restrictions depending on the type of fund you choose. As an investor, you can easily withdraw or redeem your investments when you need it. Certain funds offer the benefits of both long term capital appreciation and regular income in a single product. These provide investors with returns that remain consistent in the long run.
Compared to investments such as EPF and PPF, mutual funds offer better returns and a higher degree of liquidity. If you are about to retire within a decade and have a moderate risk profile, you can opt for investing in an income oriented fund that invests in equity and debt.
The main objective of retirement planning is to ensure above average returns to meet lifestyle goal post retirement. In terms of wealth building, a growth oriented fund that invests in blue chip (high value) stocks or real estate can help you add a sizeable amount to your retirement corpus.
Click here to plan your retirement goals.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
How to save on gift tax in India?
You need to pay taxes on gifts which exceed the limits set by the Government. However, gifts of any amount received or given from relatives including parents and spouse are tax-free.
6 Factors for Rising Health Insurance Premiums
While the demand for health insurance policies has certainly increased, there has also been a rise in the premium costs. Read this post to know the top factors that lead to an increase in the premiums of health insurance.
What Is FTSE And Why Does It Matter?
Informally referred to as the ‘footsie’, FTSE is a joint venture between the London Stock Exchange and the Financial Times of London. The acronym stands for Financial Times and Stock Exchange, and the indices of this joint venture comprise UK’s most highly-capitalized companies that are listed on the London Stock Exchange.
5 Types of Business Loan For Woman Entrepreneurs
There are now many different types of loans options in India for women wanting to explore their entrepreneurial dreams. Read this post to know 5 of the most popular options.