How to Minimise Risk & Avoid Loss in Mutual Funds

In India, a large number of people are employed and they only get salaries for their livelihood. So people try to find out how to increase their own income for a good livelihood. You might also think that how to increase income, today I will tell you about mutual funds which will be very beneficial for you. All of you or perhaps some of you have invested their money in mutual funds only by listening that it gives a good return.
The same thing was also done by my friend. He invested 20000 monthly on Mutual Funds on the advice of one of his friend, but after 1 year he was disappointed by the results and it was because he invested in mutual funds without knowing anything. A lot of people make this mistake in India.

Before starting let me tell you what is Mutual Funds?

Mutual fund is not a single scheme, it has more than 25 schemes in it and I am not saying this, this is what the Securities and Exchange Board of India has said. Mutual Funds are divided into two schemes: Equity Fund and Debt Fund. In the beginning you will have a little difficulty in understanding this, but gradually you all will understand it. 

Before investing in the market, you should know all these things which I am going to tell.

Things you need to know to minimise risk and avoid loss:

  • What is the Large Cap Equity Fund?
    In this, your money is invested in the Large Capital Company, like Reliance, Tata, Infosys, Eicher, etc. Your manager basically buys shares of these big companies with your money.
  • Second is Diversified funds wherein your money is invested in the entire market, a little money is invested everywhere, which reduces the risk.
  • Third is Hybrid funds in which your money is invested in debt and the risk is almost nil in this Investment but the return is also less. 
  • Finally last one is liquid funds that are invested for a little while or you can say these are short-term investments.

    This is just a small amount of information that is very important to you.

Always keep in mind

Tell me one thing if you want to get legal information, will you go to the shopkeeper? Of course not because only lawyer can give you the right information. Therefore, before investing in mutual funds, take the information from the professional. Because a good professional will make a good plan which is beneficial for you.

Thanks for reading. This article was bought to you by Hamari Yojana, an initiative by a Political Science student and a CA student. Stay tuned for more articles like this.If you have any query, drop a comment down below.

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