How to invest in Mutual Funds, SIP? Top 5 MFs myths busted here
How to invest in SIP: Mutual Fund is one of the most popular investment options these days. It pools money from many investors in the market to purchase securities. All mutual funds are registered with SEBI (Securities Exchange Board of India). Considering the returns in recent times, investing in mutual funds has become one of the easiest means to grow wealth. However, still, there are certain myths associated with the mutual fund investments among the investors. Here are the 5 common perceptions surrounding the mutual fund investments:
1-You need a large amount to invest in a mutual fund
This is the most common perception amongst the potential investors. With the introduction of SIP, the scenario of an investment in mutual funds has totally changed. The minimum investment amount has dropped and it offers the flexibility to invest as small as Rs 500. Image source: PTI
2-Need a demat account to invest in mutual funds
Many-a-times, investors have a perception that they need a Demat account in order to invest in the mutual funds. A demat account is not mandatory for investing in mutual funds. Although a few brokerage houses may advise you to invest via Demat account investment in the mutual fund can be done directly through fund houses by both online and offline mode. Image source: Pixabay
3-No scope for short-term gains
The idea that there is no scope for short-term gains is not true. The chances of profitability become higher when you are investing for a longer period, if you are in the securities market, especially through SIP. However, if an investor can time well, he/she can even earn well in short term. Image source: Pixabay
4- Cannot withdraw in parts
A mutual fund is very flexible and one can withdraw any number of units or amounts whenever he/ she wants.
5-All funds have a lock-in period
One of the most common myths that investors have is that all the funds have a lock-in-period which results in poor liquidity. But the fact is although some funds have a specific lock-in-period, there are certain open-ended funds which an investor can withdraw whenever he/she wants. There is a three to four days processing time that is required. Image source: Pixabay