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Investment in Mutual Funds

Saving is the habit of a successful man. This denotes your ability to earn wealth more than currently require. Habitual saving helps you in difficult time. Life is not permanent. It means, it is not much safe as we consider. Accident, earth Quake, diseases are few things that bring debacle life time. So, if you have a habit of saving surplus money, it will support in difficult time. Consider example of Ants. Before the rainy season, ants collect their food. That food saves them when they cannot come out of their houses.

In current scenario, inflation is growing more than growth in earning. If you bear a family, which is dependent on your earning, you need to care about life of every individual. Your absence may turn a hazard of their life. There are many insurance schemes by government that may become life saver in your accidental death.

Mutual Fund as Wealth Growth Plan:

How many people only want to save their wealth and don’t want it to grow in specific period of time? People ignorant of wealth plan just save their money in the form of fixed deposit that offers interest with very small rate. This traditional approach will not work in coming days of inflation. Mutual fund is one investment plan advised by financial planners.

Rs. 10,000 invested in BSE Sensex in 1980 has turned 16.45 lacs this year. This shows growth rate of 17.5 percent annually. One who is investing only thousand per months, has raised his wealth to 95 lacs this moment.

If you are new investor, you should think the requirements of your future and have a definite plan accordingly. While thinking about investment, you should have a projection of whole life time and you should think about investment objective. Investment objective generally determined with risk-return trade off. Equity market is considered to be one of the lucrative return plans, but as volatility of equity market is unpredictable, you may not consider this plan. In long term perspective Equity is the only option that can grow your wealth. “Equity is a long term capital builder, hence requires patience, diligence from the investor. (Wealth greedy people usually are reluctant to sell the equity as the rate grows and earn profit out of it. This trade requires sound knowledge of trading. This conviction is not profitable, as equities are going to grow after long period of time. Lack of investment pattern, size and allocation at one side and market fluctuation on other side, would not give optimal returns.) There are few systematic investment are available in Mutual funds, which are monitored by researchers and specialized market analysts in asset management companies. These companies surely apply some tax and other amount for brokerage.

To sum up, new investors must realize that effective investment requires a purpose, a plan, prudent risk appetite, and a reasonable time horizon for wealth growth.

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