Setting out on an Investment Journey:
Each
one of us draws a certain level of income on an annual basis. After taking care
of our expenses, the need to save up on the remaining amount becomes our
priority. One of the best ways of parking funds for contingencies that may
arise in the days to come is to begin by investing in full-proof investment
mediums. One type of investment that has been vividly noticed in the recent
times is undoubtedly equity mutual funds. The catch here is that these equity
MFs are available in different formats. Let us get to better understand the
various available alternatives, which is essentially a pre-requisite before
taking the ultimate investment call.
Going the Large Way:
First
in the list of equity MFs comes the large-cap funds. Most portfolio managers
advise their clients to settle for these kinds of MFs. This is mainly because,
the level of risk involved in large-cap funds is the least as compared to its
other counterparts. However, the return on investment is also proportionately
low. The best part about this alternative is that it provides you an
opportunity to invest in stocks of many noteworthy blue chip companies. Yet
another advantage linked to large-cap funds is that when invested over longer
time durations, they tend to remain indifferent to inflation.
Opting for the Mid/Small
Alternatives:
Mid
and small capped funds come next in the list of equity MFs. This investment
option is exactly opposite to the large-cap funds. Individuals, who are high
risk takers can be recommended small and mid cap funds. In order to kiss
success with this type of equity MF, study of the market and ability to make
the right choices is absolutely critical. One wrong pick can lead you to making
heavy losses. Mostly, less established and upcoming companies float their stocks
under this category. This is the main reason as to why the future prospects are
vague and uncertain.
The more the Better:
For
people, who are not very clear about the level of risk that they are willing to
take, multi-cap funds is the ultimate alternative they should be settling down
for. This is because, this particular investment option revolves around the
idea of bringing a lucrative alloy of large, mid and small capped funds to the
table. The USP of multi-cap funds is that they offer you the liberty of
diversifying your funds. Most importantly, market volatility acts in the favour
of multi-cap funds by offering investors the freedom of switching from one plan
to the other. Experts suggest that it is always beneficial to spread your
investments over different channels and units so as to keep losses under check.
This is another area that is one with multi-capped funds.
Take the Tax Saving Route:
Once
your income crosses the pre-set thresholds, you become liable to shell out a
certain percentage of your income towards taxes. Most of us carry out this duty
with a heavy heart. If you are desirous of saving on your tax liabilities, then
you can consider investing in Tax Saving equity funds. These funds come with a
minimum lock in period of 3 years. However, the highlight features of this
investment alternative in that under Section 80C of Income Tax Act, they offer
you a tax relief up to Rs 1.5 lakh. For people, who are looking forward to long
term investments, tax saving funds come across as a near perfect pick. Along
with tax savings, you enjoy an additional advantage of capital appreciation as
well.
Choosing a Theme:
Last,
but not the least, comes thematic funds. As the name suggests, investment in
this kind of equity MF revolves around the idea of laying base on a
pre-selected theme before going ahead with general investments. Most of the
people tend to confuse thematic funds with sector specific funds. However,
there is a vast difference between the two. While the latter speaks about
investing in popular sectors, the former talks about picking out an in theme
and investing in different sectors on the basis of this theme. You do not
really require professional expertise to invest in this kind of equity fund.
Wish
to invest in decent return providing investment alternatives? Then you must
certainly give the above mentioned 5 equity MFs a try. Make sure you do once. Just visit, www.findvise.com or download the App now.
Comments
Post a Comment