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What is Mutual Fund? Every question answered here
What are mutual funds?
Mutual funds are the diversification of investment.
In simple language, when you invest through mutual funds, first of all, you can start with any amount for investment in mutual funds, your money will be invested by a fund manager appointed by an asset management company who invests your money in stocks of several companies. As your money is invested in several companies, even if you face losses in one or two companies, it will be recovered from another company's stocks. You will definitely face gains as well as losses but in long run, it is always profit. Once a wise investor Said that one should not invest all his money in one place, and this is the reason why Mutual funds are more profitable as compared to other investments because they are already diversified.
Let’s understand the principle of Mutual Funds using two scenarios.
- As we all know the percentage returns in Bank FDs are low (5–6 %). So to generate higher returns you decide to invest in a good company. Say, Maruti Suzuki India Ltd. Let’s say you have 2000 rs to invest. Now the stock price of a single share is around 8000 rs. What will you do. You can’t buy a quarter of a stock… right..??? or say you want to buy a corporate bond issued by Reliance company with a guaranteed return (yield) of 8%, but the minimum investment amount is 10000 rs. .. then how do you invest in this ..???.
mysharelive.com/what-is-mutual-fund-every-question-answer...
What is Mutual Fund? Every question answered here
What are mutual funds?
Mutual funds are the diversification of investment.
In simple language, when you invest through mutual funds, first of all, you can start with any amount for investment in mutual funds, your money will be invested by a fund manager appointed by an asset management company who invests your money in stocks of several companies. As your money is invested in several companies, even if you face losses in one or two companies, it will be recovered from another company's stocks. You will definitely face gains as well as losses but in long run, it is always profit. Once a wise investor Said that one should not invest all his money in one place, and this is the reason why Mutual funds are more profitable as compared to other investments because they are already diversified.
Let’s understand the principle of Mutual Funds using two scenarios.
- As we all know the percentage returns in Bank FDs are low (5–6 %). So to generate higher returns you decide to invest in a good company. Say, Maruti Suzuki India Ltd. Let’s say you have 2000 rs to invest. Now the stock price of a single share is around 8000 rs. What will you do. You can’t buy a quarter of a stock… right..??? or say you want to buy a corporate bond issued by Reliance company with a guaranteed return (yield) of 8%, but the minimum investment amount is 10000 rs. .. then how do you invest in this ..???.
mysharelive.com/what-is-mutual-fund-every-question-answer...