RISK FREE MUTUAL FUND INVESTMENTS
Author : Good Will | Published On : 04 May 2021
Every Investment plan has its own unique advantages over others. Let it be a short term or long term investment it doesn't matter. Investors are now focused towards mutual fund investment as it is risk free, but being risk free doesn't mean that it is easy to trade.
Before making your valuable investments in mutual funds, it is necessary to analyze the market trends, future scopes and scope of the company you are going to invest in. Analyzing these strategies would help you to make your investment risk free and also help you to gain better returns. The professionals at Goodwill will assist you in choosing the right company to invest in based on their expert strategies. Utilize this unique opportunity to make your decision wisely by interacting with Goodwill's market experts, Contact now at +91 80122 78000.
Let's have a brief understanding on what a mutual fund is and how we can make our investment in mutual funds risk free.
WHAT IS MUTUAL FUND?
A mutual fund is a well managed investment fund that pools up money from various investors to purchase securities. These securities can be considered as stocks, bonds, money market instruments and other assets. Mutual funds are professionally managed by money managers as they are responsible for producing capital gains or income to the fund investors.
Mutual funds allow access for small or individual investors to manage equities, bonds and other securities. The performance of mutual fund is based on the performance of underlying investments.
Based on your investment it can be categorized into four major categories such as:
- Equity Funds: This is the category where investors would choose to invest their money principally on stocks.
- Fixed-Income Funds: The fixed income mutual funds allow the investors to make their investment on government bonds, corporate bonds or other debt instruments for they will be receiving a set rate of return.
- Money-Market Funds: Most of the investors consider that investing in money market funds would make them feel safe and risk-free as they are based on short term debt instruments that include mostly government treasury bills.
- Balanced Fund or Hybrid Fund: Balance funds would allow investors to make their investments in various asset classes like stocks, bonds, money market instruments or alternative instruments.
Plan wisely and choose the best mutual fund category that suits you by taking expert advise from Goodwill's market analysts.
HOW TO ANALYZE RISK-FREE INVESTMENT OPTIONS?
You will be able to judge a fund based on its portfolio as well as its performance in the market. Based on its performance we can classify a mutual fund as a high-risk mutual fund or a low-risk mutual fund.
- LOW-RISK MUTUAL FUND:
Being a conservative investor, it is always a good choice to go for a low-risk mutual fund as it would offer you a regular income by preserving your capital. The low-risk mutual funds are liquid funds, ultra-short duration funds and money market mutual funds.
As an investor you can invest in liquid funds if you have set a period of three months. Liquid funds are flexible with an easy exit option as compared to bank fixed deposits. Investing in an ultra-short duration fund would help you to gain a high degree of liquidity with regular income. The investment period would last around six months and hence it's riskier when compared to liquid funds. The investment duration for a money market mutual fund is one year. The money market mutual fund is less vulnerable to interest rate risk and would help you to preserve your capital by providing a regular income.
Investing your investment in low-risk mutual fund would make you feel safe and risk-free.
- HIGH -RISK MUTUAL FUNDS:
High -risk mutual funds are nothing but funds that have high potential and capability to provide the investors with high returns. Although, these funds comes with high risk and are also volatile in nature. These high risk mutual funds are capable of returning great dividends to the investor.
It is recommended that before investing in a high-risk mutual fund, an investor should thoroughly analyze the performance of these funds in the market on a day-to-day basis, as this will help you to be cautious about how your funds are performing in the market. You can seek the help of Goodwill as they have been one of the best brokerage firms in India in the last decade. For more details, visit the website.
If you are an investor who is ready to take high-risk for higher- returns, you are welcome to invest in these funds.
HOW TO INVEST IN MUTUAL FUNDS?
Follow these two steps to start your investment in mutual funds:
Step-1: Open a DEMAT and trading account. If you are confused about how to open a trading account, Goodwill is here to help you. Open your DEMAT account instantly and Free of cost. Click here to get started!
Step-2: Once your DEMAT account is set up, start to buy or sell mutual fund schemes via your DEMAT account.
Since it is a dematerialized account, you can hold mutual funds along with hold stocks and other securities.
BENEFITS OF MUTUAL FUND INVESTMENT:
The benefits of investing in a mutual fund investment are:
- Liquidity: The most important advantage in mutual fund is that the investor can withdraw the funds at any time.
- Diversification: Investors interest are safeguarded as there is low risk in building a portfolio.
- Better Management: The experts pool up the money from the investors and invest in different securities to help the investor to acquire profit.
- Flexibility: Investors can invest smaller amounts in mutual funds based on their flexibility.
Mutual fund is nothing but making your investments wisely in stocks or funds that have potential to perform well in the market and also have the capability to yield higher profits.
Goodwill has been awarded the best trading brokerage firm in India for the past three consecutive years. This was an achievement earned for its efficient strategies and excellent customer satisfaction. Visit Goodwill's Facebook Page to get live updates on trading.
Analyze the market and get expert advice from the Goodwill's market analyst for higher returns!
Start your trade with Goodwill Wealth Management for a victorious trade journey. Contact today on +91 80122 78000 to trade your stocks in a smart and efficient way