Mutual Funds And Beyond

mutual-fund.jpgThe world is ever evolving and so are human thoughts and aspirations. To survive and grow in this scenario, apart from aiming at high salaries and fat pay packages, one must know how to invest and multiply his/her assets. ‘Make your money work harder than you’.

The modes of investment are diverse and have something in store for everyone, be it small businessmen, executives eyeing the safer mutual funds or big players ready to risk their money directly into the share market and aiming at substantial returns or the really vigilant ones trying their hand at day trading.

In the present market, there is a plethora of mutual fund schemes that help you to invest and manage your money in various diverse sectors of the economy. These consist of a sponsor company, a group of trustees, Asset Management Company (AMC), which invest the combined shareholders’ assets in various market sectors and carefully monitor their trend and growth. This diversification, which is not achievable if you are lone investor with a small investment amount at hand, covers up the risks involved with the fluctuation in share market and promises a continuous growth.

There are a pool of schemes floated by various public/private sector companies and may be categorized on investment period as open-ended or close- ended, or on the basis of investment objective as growth, income, balanced, etc. These companies maintain a portfolio and mention their target sectors of investment for the investors to make their assessment before stepping in as a shareholder. While some funds offer high liquidity, others have a fixed investment period. The investors have the right to be informed regarding the company’s profit/losses and their impact on their invested assets through the Account Statement released monthly, quarterly or semi-yearly as the case may be. At the same time, they are required to submit a bi-yearly report to SEBI who monitors the trust of the investors. Therefore, these schemes turn out to be secure, with someone trustworthy keeping an eye and protecting your interest. On the other hand, those dealing straightaway with buying/selling shares need to be active and be equipped with the market trends so as to reap the benefits as and when there is an opportunity. They need to be informed about the company’s current and forthcoming ventures and developmental plans coupled with their own ability to study its impact on the economy.The authenticity of the discussion is evident from the recent Sensex crash that swept with it the unaware, the small-scale and the short-term investors. The fact that mutual funds amount to low risks and a gradual growth with average return of about 25-35%, attracts many investors looking for a steady asset-building process, no matter whether they possess the financial know-how of the stock market or not. Ishant Arora