Invest through direct shares or equity mutual funds? – Analysis
Invest through direct shares or equity mutual funds? Know what is the benefit deal for you. Usually, you can start investing in mutual funds from Rs 500. But there are also some companies that offer the facility to start investing from Rs 100.
‘Profit is the reward of risk’. This statement of Prof. Holley fits the business world to the investment market. Talking about investing in the stock market, if you are knowledgeable and understand the movements of companies, then you can invest directly in those stocks which can give you better returns. However, it is a difficult task for a common investor to research companies to invest in shares. Equity mutual funds make this work of common investors easy. Equity mutual funds invest not in a single share but in the shares of all companies. Because of this the losses from any one company does not affect your investment portfolio.
Advantages and disadvantages of direct investment in stock market
The advantage is that if investors invest directly in the stock market, it increases the possibility of more returns as well as more losses, but it also has its own dangers. Investing directly in the stock is good in terms of high returns but sometimes the risk of loss increases and heavy losses may have to be incurred. If an investor invests directly in the stock market, he has to pay constant attention to his portfolio.
SEBI Registered Investment Advisor and Certified Financial Planner Manikaran Singhal said, “Those who are not aware of stocks, how to buy shares, invest in mutual funds through professional management.” It contains everything under the discipline. Go through SIP every month. Yes, if someone has full time, if an investor knows about the market, he has a lot of time for research, then he can go for a direct share, otherwise mutual fund is the best option.
Invest for long term
Many times it happens that the investors expect huge returns from the stock market very quickly, while the market does not run according to our thinking, so invest in the stock, you have to be patient, because you will get good returns on waiting. Can.
Fund manager gets to know
If you invest through a mutual fund, it is managed by professional fund managers. The fund manager has a good understanding of market fluctuations. In addition, the risk of fluctuations is also reduced by diversifying the investment portfolio.
Suresh Sadagopan, Financial Advisor, Ladder 7 Financial Services, says that if an investor goes to invest in a direct share, he should have complete knowledge about the stock market. He has to do research, it is difficult for new people, so it would be better to invest in mutual funds through professional management. He said that the professional manager has knowledge about the current condition of the market and about the stocks, which are performing at what times and how. Therefore, the path of mutual funds is right.
Can you start investing with a small amount?
Usually, you can start investing in mutual funds from Rs 500. But there are also some companies that offer the facility to start investing from Rs 100.