Whenever it comes to investing for an individual investor, the dilemma has always been whether it is sensible to invest directly in equities or it’s much wiser to invest in equities through the mutual fund route.
Most Experts do advise that it’s better for beginners to first test the markets through the mutual funds route instead of they themselves directly investing in equities. An investor can start to invest directly in stocks once he or she gets a fair idea about the fundamentals and/or technical’s of at least a few good stocks in different sectors (Information Technology sector, FMCG sector, Pharma sector, financial sector etc) in the equity markets.
It’s certainly a good idea to invest in the Mutual funds till the time the investor feels confident about directly investing in individual stocks/Companies. A seasoned investor, depending on his /her risk appetite can invest directly in equities as well as in mutual funds. It’s sensible for the investor who is still learning the tricks of the share market to get professional help from experts in the industry like the specialised teams in financial services firms. Our expert team at Lakshmishree will always be available to handhold you throughout your successful journey of investing in shares and mutual funds in the financial markets.
A mutual fund is nothing but a pool of money (Fund) from different individual investors who invests fixed sums of amounts at specified time periods as per the fund's criteria.
This fund is managed by a professional manager called Fund Manager. Normally the fund manager has considerable relevant experience in investing with regard to the specific companies or specific industry or any other focus area of that particular fund. This fund manager takes all investment decisions with regard to the fund managed by him. Normally the name of the mutual fund gives you an idea about the investment focus of that particular fund. An example would be that a large-cap mutual fund will invest in only large-cap companies whereas a small-cap mutual fund will invest only in small-cap companies. Similarly, a balanced mutual fund will invest in both equities as well as debt instruments.
Thus it is always important to know the investment rationale of a particular mutual fund and the vision of the fund manager to help the investor arrive at a decision to whether and how much to invest in a particular mutual fund. It always helps if the investor is associated with a reliable financial services firm who normally guides properly the investor in arriving at the correct decisions after assessing the risk profile of the investor. The professional team at lakshmishree will always be there to help you in case any investor needs to assess his risk profile and then take investment decisions.
One of the biggest advantages of Mutual funds is that it is always managed by Professional manager who has considerable experience in managing large amounts of money in a specific specialised sector/ companies /industry.
It is also seen that the Mutual Funds gives the retail investor an opportunity to invest in equity markets with even a very little amount which is done at periodic intervals. An investor can invest as low as Rs 100 or Rs 500 or more at periodic investment (SIP) through a mutual fund. An investor can invest in various ways in mutual funds by using systematic transactions like Systematic Investment Plan(SIP), Systematic Transfer Plan(STP) or Systematic Withdrawal Plan(SWP).One of the additional benefits of mutual funds is that the top funds do give dividends apart from the appreciating NAV’S of the funds or your investments.
We at Lakshmishree can guide you with different investment options for all types of retail investors -from small investors to very large investors.
Another Advantage of investing in Mutual funds is that the investor is able to diversify his investment when he decides to invest through mutual funds. The Fund manager usually manages anywhere between 40-60 companies under each fund and so the investor gets an opportunity to diversify his investment with one investment in so many companies. The mutual fund investing offers flexible and easy financial planning as you get options to invest in various time duration plans such as daily, weekly, fortnightly, monthly etc. Lastly it can be said that the investor benefits, as depending on the investors risk profile, the mutual fund investments can be done for debt or Equities or both and can be for short term as well as long term.
This is one of the main questions in the minds of most investors. It is a valid question too since the top most thought in the mind of retail investors is that he/she will have to shell out certain minimum fees as charges to the mutual fund company for managing his/her investment. For the investors who are very much concerned about the cost involved in investing through a mutual fund, the good news is that there are also various no load cost mutual fund schemes.
The point each investor has to take into consideration while investing is whether he or she has the required knowledge of the equities and Debt markets. Another important thing to remember is whether the investor has enough time to manage his own funds to generate returns that will be better than that of the fund managers returns. Here it is worth considering while making the investment decisions, if it’s really worth the time and effort the investor has to put in and spends doing it himself/herself when the same can be done better by investing through the mutual fund route.
It’s always sensible to invest through a professional mutual fund manager rather than a trial and error method of investing done by the individual investor on the basis of unconfirmed tips, news or alerts from dubious sources.
For the individual investor who craves for some adventure and is willing to take more risks, one of the ways can be to invest a very small portion of your investment by oneself and the rest through a mutual fund managed by a professional and take a performance review in a time period of 1 to 2 yrs.
By doing so, Then you can decide yourself on the basis of returns you get from both your direct investment in equities and through mutual funds. You can slowly shift your portfolio more towards the one which gives you more returns on investment.
We, at lakshmishree are always a phone call away from helping you in all your equity as well as mutual funds related investment decisions.
Ping us on +91 88532 59459 to get answered to your every query for your investments.
The First thing you need to understand before investing in mutual funds is that you have to be clear about the financial goal for which you want to invest.
Depending on the financial goal, you can decide within what time you can achieve that financial goal.
Once you know the financial goal and the time duration, keep a reasonable expectation with regard to the return on investment for the amount you can invest at periodic intervals.
Now, you can calculate the amount you need to invest to reach your financial goal using the Sip route. (Any Sip calculator will give you the exact amount you will have to invest to reach your goal target within your targeted time duration)
Now considering a reasonable return of investment of 15 % per year (after adjusting for inflation), you can easily calculate the amount you need to invest each month for the next 4 years to buy a car of Rs 10Lacs. (use Sip calculator from the Lakshmishree website-in the above given example, you will have to invest every month Rs15000/- approximately by Sip for reaching a target of 10lacs in 4 years time at 15% annual appreciation.)
Once you know how much you want to invest at periodic time intervals, Our team at Lakshmishree will always be there to guide you through the best investment opportunities as far as investing in various mutual funds is concerned. We, at Lakshmishree, have more than a decade of experience in the financial markets.
Basically 3 different types of Mutual Fund are there:
1.Equity Mutual Fund
2.Balanced Mutual Fund
3.Debt Mutual Fund.
Equity Mutual funds are in various schemes like the Small cap, Midcap, Large caps, Multicap,
And various other schemes like special purpose funds, sectoral /thematic funds, Arbitrage funds etc.
This is mainly for long time Goals and is volatile in the shorter time duration.
Balance Mutual funds are in various schemes like the Equity oriented fund, Debt oriented fund, Asset allocation funds. These are for Stable growth and usually balance risk.
Debt Mutual Funds are in various schemes like Short terms funds, Income and bond funds,
Medium and long term Funds, Gold funds etc. These are normally with fixed returns and with safety of capital as the primary objective. Its advantage is that it reduces risks in one's portfolio.
1. You have to do the KYC.
2.Pan and Aadhar Card
3. Bank account with recent bank cheque leaves.
4. Advisable to use the same mobile no and email address for all your investments.
We, at Lakshmishree, can help you get your investments in mutual funds done in the quickest possible manner with the seamless ease because of the decade old experience of our team in the financial markets.
You can sell your investment made in mutual funds as and when you need it.
You will have to follow the relevant tax laws (long term capital gains or short term capital gains) depending on the duration of your investments. You have the option of selling a part of your investment or the entire investment at any time.
If any restrictions or lock in period is there, you are normally informed when you buy the units of that mutual fund.
Normally, the Mutual fund sale proceeds come to your linked bank account in T+1 day for short/liquid term schemes and t+3 days for Long term Equity and Debt Schemes)
You always need to remember the Tax implications and Exit load when selling your mutual fund units.
To sum up, Investing in mutual funds is a sensible way to make the best of the opportunities arising in the financial markets. In simple cricketing comparison, direct daily investing or day trading can be compared to T20 cricket wherein the risk is high and returns or losses too can be high unless you are a very skilled day trader and are lucky most of the time. Investing directly in equities over a period of time in staggered periodic investments can be compared to a 50 over cricket match which can be at times very exciting and at times very boring with reasonable returns and reasonable risk as far as your investments are concerned.
Investing in Mutual Funds is more like a 5 day cricket test match wherein you got to have discipline, focus, and patience with regard to your investment. It has been seen that when the investor does the investment in mutual funds with proper guidance from a reliable financial planner/team, the returns over a longer period of time invariably leads to massive wealth creation for the investor.
It’s always seen that rather than timing the market, the time spent on investment is more profitable and important. So a prudent way for an investor would be to hold your investments with a long term view and keep doing SIP in mutual funds and periodic investments in equities under the guidance of a very good financial services company for a longer time period without skipping the investment cycle/dates.
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