After investing in a mutual fund, we make profit as NAV of the fund increases . My question is how can NAV keep increasing day by day? Somewhere it must saturate and become a constant more or less. (This is because I think, there is a limit to growth in every aspect of economy..things can not move to infinite values) After that what happens? Does investment in mutual fund remain profitable? Or is there something wrong with my argument?
Yes I understand that mutual funds also give dividends and that is one way of making profit. But just after declaring dividend, the NAV also drops proportionally. What about that?