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4 Common misconceptions about mutual funds


4 Common misconceptions about mutual funds

By investing in mutual funds online, you can grow your net worth, improve your standard of living, and secure your loved ones. As beneficial as it is for investors to explore mutual funds, many myths might reduce their confidence. Here are some of these myths and the truth about them.

Myth no. 1: Mutual funds are not safe

Many believe that investing in mutual funds online comes with many risks and may not be suitable for risk-averse investors. However, it is important to know that mutual funds cater to all risk appetites. You can invest in high-risk mutual funds if you have a long timeline ahead and do not need the money immediately. Thanks to the power of compounding, your returns can be substantial with time, and the risk will also get distributed. There are also many low-risk options, such as debt funds, that offer low to moderate risk. The choice of risk ultimately lies with you and depends on your financial goals.

Myth no. 2: Mutual funds require big lump-sum investments

Mutual fund investments do not require a large investment; you do not always have to invest in a lump sum. You can opt for a Systematic Monthly Plan (SIP) and start investing with as little as Rs. 100 per month. You can adjust the investment as per your income and other lifestyle needs.

mutual funds

Myth no 3: You need to be an expert to invest in mutual funds in India

Mutual funds deter most people as they lack the relevant knowledge to invest in them. However, online mutual funds are the perfect investment for new investors as they do not require active management. The fund manager mmakes all the decisions on your behalf; you do not have to do anything yourself. This is an ideal option for people who are too busy to manage their investments or are unaware of how the market works.

Myth no. 4: Mutual funds are long-term investments

While investing long-term in mutual funds may be advised for better returns, it is not mandatory. There are many short-term mutual fund options for short or mid-term goals that you choose from. Mutual fund and SIP misconceptions have stopped many people from fulfilling their dreams. However, most of these myths have no real foundationKeep in mind that mutual funds are a safe investment instrument that can be suitable for most investors. The returns are high over time, and they are easy to manage. So, start investing in them online only on the Moneyfy app.

Susan M. Davis

Tv expert. Proud web nerd. Friend of animals everywhere. Hipster-friendly coffee trailblazer. Spent college summers short selling clip-on ties in Hanford, CA. Spent two years developing jack-in-the-boxes for fun and profit. At the moment I'm merchandising human growth hormone in Prescott, AZ. Spent several years implementing birdhouses for the underprivileged. Had some great experience lecturing about spit-takes worldwide. What gets me going now is building chess sets in the aftermarket.