Mutual Fund investment: Time to bust ten common myths
Mutual funds offer diversified investment options by pooling funds from multiple investors into various asset types. “Contrary to the common belief that mutual funds invest only in stock markets, they come in various types, investment is made in equity, debt, and hybrid funds, allowing investors to align investments with their risk tolerance and financial goals," said Gurmeet Singh Chawla. According to Chawla, another misconception is that mutual funds are unsuitable for young investors.
In truth, mutual funds cater to investors of all ages, providing diverse investment options suitable for different life stages and financial goals keeping risk appetite into consideration. Mutual Funds require minimal capital to start investing. Many funds offer systematic investment plans (SIPs), enabling investors to begin with modest amounts and gradually increase their contributions over time.
Chawla says that although some mutual funds entail a lock-in period, not all do. This period varies depending on the fund type, while many funds offer liquidity and flexibility, enabling investors to redeem their investments at any time. It's crucial to note that higher past returns in mutual funds don't guarantee future success.
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