What is Mutual Funds and SIP #Investing #Option #Tradingview

Topic - What is Mutual Funds and SIP

What is mutual fund in simple words?

Mutual funds let you pool your money with other investors to "mutually" buy stocks, bonds, and other investments. They're run by professional money managers who decide which securities to buy (stocks, bonds, etc.) and when to sell them. You get exposure to all the investments in the fund and any income they generate.

Why should you Invest in Mutual Funds?

A few key benefits of investing in mutual funds are:

Diversification: Mutual funds offer diversification, which reduces risk by spreading your money across different assets. This helps to reduce the risk associated with investing in individual securities, as losses in some investments may be offset by gains in others.

Professional management: Mutual funds are managed by well-qualified and experienced fund managers. These managers make investment decisions on behalf of investors, and they are assisted by a team of experts who analyze securities, monitor the market, and adjust the fund's holdings as needed.

Liquidity: Mutual funds are also liquid, which means that investors can buy or sell their units on any business day. The redeemed amount will be credited to their bank accounts within 1-4 working days, depending on the type of scheme.

Accessibility and affordability: Mutual funds are accessible to investors at a low cost. Investors can start investing with relatively small amounts of money, making them suitable for both novice investors and those with limited capital. Mutual funds achieve cost efficiencies by pooling money from multiple investors, which leads to lower investment costs compared to investing in individual securities.

Flexibility: Mutual funds offer a range of options to investors, such as debt, equity, hybrid funds, and more. Each type has its own unique characteristics and potential benefits. Investors can select funds that match their financial objectives, level of risk comfort, and investment timeline.

Tax benefits: Investors can get tax advantages by parking money in certain types of mutual funds, such as Equity Linked Saving Schemes (ELSS).

Regulatory oversight: In India, mutual funds are regulated by the Securities and Exchange Board of India (SEBI). SEBI has laid down stringent rules and regulations to protect investors' interests and ensure transparency, including requirements for reporting, disclosure, and risk management.

The traditional form of SIP investing, investors do not have the option to increase their periodic contributions during the investment tenure.
If one wants to invest more money than they were originally able to they must open a new SIP.
This is where Step-up SIP proves to be highly resourceful as it allows you to translate their
increased earnings into their already ongoing SIPs instead of starting a new account.

You can invest in Step-UP SIP using below steps

Select the mutual fund and click on SIP.
Click on the check box for Automatic step-up (optional) .
Click on Increment percentage to select the percentage by which the SIP should increase.
Select the date under Choose date.

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