Mutual Fund Investment: When is the right time to start investing in mutual funds?

financialexpress.com:

Investing in mutual funds can be a powerful tool for wealth creation, especially in a country like India with a growing economy and a burgeoning middle class. However, the question of when to start investing in mutual funds is one that many individuals grapple with. The simple answer? The sooner, the better. Let’s delve deeper into why and how to get started.

Before diving into the timing aspect, let’s understand what mutual funds are. Mutual funds are investment vehicles that pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. They are managed by professional fund managers who make investment decisions on behalf of investors.

One of the most compelling reasons to start investing in mutual funds early is the power of compounding. Compounding refers to earning returns not just on your initial investment but also on the returns generated over time. The longer your money remains invested, the greater the compounding effect.

Also Read: Mutual funds to fixed deposits, where to invest for 5-year financial goals?

Adhil Shetty, CEO, Bankbazaar.com, explains, “Early investment can significantly grow your wealth over time. Firstly, it leverages the power of compounding, where your investment generates returns not just on the principal but also on the accumulated earnings. Starting early allows more time for your money to grow exponentially, leading to substantial wealth accumulation in the long run.”

“Secondly, early investments help mitigate the impact of market fluctuations. By staying invested for a longer duration, you can ride out market volatility and potentially benefit from rupee cost averaging, where you buy more units when prices are low and fewer units when