Why Invest In Mutual Funds In 2021?

“Don’t worry about what the markets are going to do, worry about what you are going to do in response to the markets.”

Influencing advertisements affect your mind to invest in mutual funds and play safe. But do you actually know if they are right after the virus sets away? Let us have a look:

The mutual fund industry is almost 3 decades old now, but it has emerged a lot since the last few years only. The main reason behind it is, the interest rates are lower from 9 % to 5%. As India is moving on a path to achieve a $5 trillion economy, there are fewer chances to see those rates again soon. Mutual funds give double-digit returns on investments aged more than eight years.

The popular way to invest in mutual funds suggested by the best financial planners in Surat is SIP. We have observed that most of the people spend their income on their living and luxury. They choose to invest the remaining amount. Mutual funds-SIP offers a disciplined way to invest a fixed amount at a regular intervals. It is beneficial to ensure consistency in long term investments. And that is how SIP helps you invest your remaining income in a better way.

Other asset classes like FDs, PPF, NSC & KVP all offer returns depending on the rate of inflation. The interest rates are already low, and thus, it doesn’t make sense to invest in them for achieving long term goals. Other alternatives for these investments i.e. Gold & Real estate have different issues. Gold is already up by 50% in the last few months. It would emerge only in difficult times like wars or global economic slowdowns.

Real estate investment could get challenging. It requires higher investment and provides the lowest liquidity in case of an emergency. So, when we check all the alternatives, mutual funds get a beneficial edge over them.

Here’s why:

1) Managed by professionals: Direct equity investment requires good knowledge of equity markets. It also needs regular monitoring of stocks, economy and other factors affected. Thus professionals with decent track record manage Mutual Funds who take care of our investments and update us for our own good.

2) Flexibility and convenience: It is possible to make SIP investments for as low as Rs.1000 in equity, debt, and Gold. The investor gets the advantage of investing any time he wishes to. In case of any emergency, he can get the withdrawal of any amount within 4 days. There is no compulsion of investment horizon in any of mutual fund schemes.

3) Wealth Creation: Many mutual fund schemes provide 12-20% of returns in the long term. It signifies the power of compounding. The best schemes have created wealth from 25 times to 100 times in the last 25 years. Investors should keep the horizon of 20 years plus immense patience to be wealthy.

Yes, mutual fund investment is a correct decision but along with it, you need a financial advisor too. So, if you ask the investment consultants in Surat they’d definitely guide you to invest in mutual funds in 2021.