Most people will find investing a very difficult task. With what they have, people want to make as much as possible. Although some people get good returns, this is not the case for everyone. Some people end up losing money due to bad investment decisions and lack of understanding. Besides that, there are so many financial instruments and derivatives for you to invest in. You can invest in the stock market, futures, commodities, foreign exchange and many more. So how do you decide which form of investment is the best?
If you are unsure about what you are stepping into, your best bet will be to make mutual fund investment. If you do not know what mutual fund investments are, this form of investment is actually putting your hard earned money into several forms of investments. By investing in funds, you are actually placing your money in the hands of professionals. These analysts will use your cash and put it in areas which they think have growth potential. The good thing about mutual funds is that it lets you diversify your portfolio. Instead of just investing on one share, you are investing in several companies at one go. Besides that, this form of investment also allows you to gain profit without working too hard on your own. If you choose to invest by yourself, you will need time to monitor the share market. But if you hire a professional to do it on your behalf, you can be rest assured that they will make the right investment decisions at the right time.
So what are the top mutual funds in India? And what are the best mutual funds to invest in? The truth is that there is no one mutual fund that ranks number one. Every year, there are several top performers. And the list changes frequently from year to year, depending on the movement of the market and the industry.
The best mutual fund to invest in really depends on your risk tolerance. Risk tolerance is basically your appetite for risk. The higher risk, the greater returns and vice versa. If you are willing to lose your money in return of higher profits, you will want to invest in high return sectors like oil and gas commodities and also forex. Your mutual fund will try to maximize your return, but it will not protect you from any unwanted risk. If you have a family and you are not willing to risk your life savings, you can look for mutual funds which invest in low risk items like treasury bills, government bonds and fixed deposits. Despite the lower rate of return, you can be pretty sure that your savings will be secure.
In addition, the investing agencies give varied buying structures of the mutual funds such as open-ended schemes, close-ended schemes and interval schemes. The open-ended schemes allow the investor to invest on the mutual funds at any time of the year. The open-ended funds do not have any fixed maturity levels. The investors can easily buy and sell this type of mutual funds at present Net Asset Value (NAV). On the other hand, in the closed-ended mutual funds, the maturity is fixed and the liquidity is low as compared to the open-ended fund structure. Lastly the interval scheme is a mix of both open-ended and close-ended mutual funds.