4 Replies to “What is Mutual Funds and SIP Please explain in detail.Which investment is best and safe.?”

  1. Mutual fund is a best investment option.It depends on sharemarket.there are two types, lumpsome and sip.Sip means systamatic invesment plan.ie,pay as monthly instalments.,starts from 500.Lumpsome means single investment.minimum 5000to mxm whatever.U will get it as units,ie,if u invest 5000 ,suppose unit price is 10 u will get 500 units. Then u have to watch the NAV,ie, Net Asset Value.ie the change of of ur unit price.If it increase to 12 ur fund value will b 6000.like this u can check ur fund devpt.Remember it may come down also depending on the mkt conditions.But compariritively safe as the efficiant fund mangers are managing the funds.They are investing the funds in best componies and through ‘swich on’ minimising the risks and try to attain mm profits. They are managing the funds of different people togather and investing it in different companies so that u can become a part of best companies with small investments.Remmember onething more when u r investing ,ie, there are two types of investments.Open ended and closed ended. open ended means u can come out of ur fund whenever u like or unit price is high.Closed ended means u can come out only after the lock in period,ie , after 3 years or like that.(normally it is 3).This time is best to invest in mfs especially inSIP.because now unit price is very low so that u will gt more units as the mkt is low and u can make a good profit when the mkt is up.

  2. Mutual fund involves the collection of capital from individual investors by fund managers. This capital is then invested in other investment options like equities, debts etc. The profit earned from these investments will be distributed among the individual investors.

  3. Mutual funds are the safe way to invest for better returns in long run.Mutual funds gives a better return than fixed deposits as these funds are managed by professional corporates and invested in equity and debts. SIP is a fixed amount invested monthly in mutual fund for a fixed period where units are purchased based on the NET ASSET VALUE , the units purchased every month varies based on the NAV but the monthly investment remains the same.Anyone who is not familiar with the share markets this is the best way to invest.

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