6 Investment Myths Busted! August 28, 2017 Posted By MCB - Arif Habib
Have you been thinking about investing in a Mutual Fund but does the prospect seem too intimidating? Are you scared because of what people around you say about market stability and other investment risks? Well it’s time to put an end to any doubts you may be having; we’re here to bust some of most common myths about investing in Mutual Funds.
1. Investments Are Too Risky:
Most people automatically assume that mutual funds as a whole are a risky avenue, one that is too daunting for most people. However, this is not true. Any investment comes with its own amount of risk and investors can select their appetite for risk before making any investment. While stock market investments may be more volatile than others, Money market investments are relatively stable. It is very important to understand what investment can get you what kind of returns.
2. You Need to be a Financial Expert to Invest:
There is one widely believed myth that not everyone can make sound financial decisions and that you need to be a financial expert to get good returns. This is not necessarily true because Mutual Funds are actually quite simple if you get the hang of them. In addition to this, it is important to note that Mutual Funds are managed by seasoned Fund Managers who manage the investments on your behalf. Technically you hire a team of experts to take care of your money, along with everyone else’s. And the best thing is that there’s no preferential treatment of any sort that people might usually face when trying to invest in stock markets directly.
3. Investing is Just Too Much Time and Effort:
That is partially true, IF you try and invest directly in the stock markets. As a business owner, a professional, a home maker, a student or you have other priorities that make up most of your day to day routine. Monitoring the markets, staying on top of the news and making calculations about the impact of various factors on stock prices isn’t exactly easy; and it can be time consuming and require a lot of effort. A professional mutual fund manager will have a dedicated research division with experience professionals to help it perform these tasks. All these efforts make it easier for the investor, as Fund Managers take care of every minute details on his behalf.
4. You Need a Large Sum to Get Started:
Contrary to popular belief, you don’t need a huge cash pile to invest in Mutual Funds. While other avenues of investment like Gold and property require a substantial amount to get started, with Mutual Funds you can start your investment journey with as little as Rs. 500. Small Investments, made consistently, can really add up due to the compounding and give you better returns than any bank’s Savings Account. You can check how much saving a monthly amount can add up to here.
5. Only Older People Should Invest Money:
Many believe that investment in mutual funds is better suited to those who are setting aside money for retirement. However, this couldn’t be far from true. The earlier you start saving and investing, the better it is. Investing in Mutual Funds will actually increase the value of your money as monthly compounding keeps adding profit to the amount of money you invest. This will allow you to meet your short term as well as long term goals in a much more calculated way.
6. Once Invested, It’s Difficult to get your Money Back:
Many people hesitate to invest in mutual funds because of the supposed lack of liquidity. They think that once invested, it’s extremely difficult to withdraw your invested amount. However, with the introduction of online investment portals, withdrawing your investment amount has been made even easier. Redeeming your investment amount partially or even fully is something that can be achieved within a few clicks! Learn more.
The best way to make financial decisions about your hard earned money is to have all your cards on the table, know all your options, and make an informed choice.