Mutual funds: Why should you stay invested for long? MintGenie explains

livemint.com:

mutual funds are one of the most sought-after financial instruments among retail investors because they are diversified and invest in an array of securities and debt instruments based on a predetermined criteria. Mutual fund investments are a safe investment instrument and are usually preferred over securities by retail investors. “Retail investors should get exposure to equity via mutual funds as they are more diversified in nature and are managed by professionals.

Besides, they give you a taste of blue chips by making you part with a tiny sum or say ₹500," says Deepak Aggarwal, a Delhi-based chartered accountant and financial advisor. 1. Map returns to indices: Mutual funds enable investors to map returns to benchmark indices such as Nifty 50, Sensex, Nifty 100, Sensex IT, among others.

2. Managed by Experts: Unlike standalone securities, mutual funds are managed by experts, so they are considered safe and secure. 3.

Diversity: Based on the theme and category of mutual funds, investors get the exposure to a large number of stocks across the market capitalisation spectrum. For instance, when someone opts for a large cap fund, one gets exposure to a number of large cap stocks. Likewise, when you opt for a mid cap mutual fund, one gets exposure to a number of stocks in this category.

ALSO READ: Inflows into equity mutual funds surged for 35th month in a row: Report 4. Auto mode: One does not need to worry over reallocation of assets. For instance, at the end of the financial year or even during the year, when you feel you need to redeem some of the stocks and redeploy the proceeds into some other stocks then this is done by the fund manager based on a predetermined criteria.