Mutual
fund
Technically speaking it is the trade of collecting money
from investors who share a common financial goal and then
that money is invested in stock market either in shares,
debentures or commodities or other securities. The income
earned are shared in between unit holders in proportion
to the number of units owned by them. MUTUAL FUND is the
kind of cycle where money floats from one hand to another.
Giving it a cycle of floating of money it can be described
as Initially money collected from the investors. The money
collected by fund manager. Fund manager then invest money
in capital market , the securities or shares or debantures
then the profit or the returns then again goes to unit holders
that is again to the investors.
The
advantages of investing in a Mutual Fund are:
Professional Management :to every investor a proffessional
is there to manage their investments and they time to
time inform the investors about the positions and annoucements
of leading and profitable shares.
Diversification
:the portfolio designed by best mutual funds for the investors
(risk management) to give the various options to invest
so that even if the capital market lows down they some
averagely marked profits. (foreign securities are mostly
preferred)
Convenient Administration :one can buy shares via internet
or mobile or through any broker.
Return Potential : Even if one sees the loss but still
the profitable margin is much more.
Low Costs: the unit value of each share is low to provide
investors for easy investments.
Liquidity : Money can be taken out easily via the options
like a cheque, make a call or with cash as well.
Transparency , Flexibility and Choice of schemes
Tax
benefits : Most beneficial is the tax benefit. You can
have investments and also on that u can have tax benefit
on that
Well regulated: the funds are regulated under many government
regulations which protect investors against fraud. the
most attractive from the top catogaries which we see and
conciously keep in mind are liquidity, transparency because
there is nothing to hide. With the advent of live online
trading one can place orders, can see the prices going
up and down and if feel the need can cancel their orders.
Choices of schemes,
