Mutual Funds Are An Easy Way To Invest In Equity

For investors who do not have the time and interest to constantly keep an eye on the market movements, investing directly in shares can prove to be dangerous. There is a need to constantly keep an eye on the equity portfolio, otherwise the opportunity to exit from weak stocks and enter the right stocks at the right time may be lost.

For such investors, investing in equity through mutual funds can prove to be a better strategy. In the case of mutual funds, the responsibility of managing the shares is put on the shoulders of the fund manager, but choosing the right funds for the portfolio is the investor’s problem. Choosing the right fund based on the risk-bearing capacity, the fixed period for investment and the expected return are very important.

The method of investing in mutual funds also holds importance based on the nature of the markets. A lump sum amount can be invested in a mutual fund or the systematic investment route can be used.

Mutual Fund Portfolio

To get good returns, investors should create a mutual fund portfolio that is balanced between large-cap, mid-cap and small-cap. Such a portfolio should not be too biased towards large-cap equities or sector funds that have high volatility along with high returns. They should definitely invest in mid-cap and small-cap funds. However, the ratio of investment depends on the risk appetite of the investor.

There are many other factors to look at, such as whether the fund specializes in growth or value. Knowing about the different cap funds in the market is a good way to know which fund is better for your portfolio and investment style.

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