Mutual fund investment is slowly growing to be a popular trend among investors globally and is even considered to be a more feasible than bonds and stocks. However, for a beginner, mutual fund is an uncharted territory and any carelessness in treading through the market could translate into losing money.
There are several myths that surround the concept and idea of mutual fund investment. The following section aims at debunking them and providing you a crystal clear insight on mutual fund investment. Let’s have a look.
Myths Associated with Mutual Fund Investment
1. Mutual Funds are Restricted to Experts
Most people restrain themselves from investing in mutual funds, simply because of the reason that they do not possess an expertise in this regard. Although, it does requires a bit of understanding but anyone can acquire the knowledge in short time duration and get on with investing confidently.
2. Mutual Funds are Primarily Long Term
Although, investing in a mutual fund for a longer duration tends to have an edge and provides you more return on your investments, this doesn’t translate into the fact that mutual fund investment is restricted only to long term duration. As a matter of fact, mutual fund investment can even be made for a period of few weeks or days.
3. Mutual Fund is basically an Equity Product
In financial terms, mutual funds and equity product sound to be similar. However, in actuality both of the two are poles apart. In mutual funds’ investments are made into a several variety of instruments that primarily range from equity to dept.
4. Mutual Fund Investment Entails Large Sums
Another myth that demotivates people to invest in mutual funds is that it requires large sums of money for the investment. This is entirely incorrect and small investments can also be made to obtain some returns.
5. You Need to Have a DMAT Account for Mutual Fund Investment
First of all, a DMAT account is primarily meant for share trading and it has nothing to do with mutual fund investment. Although, having a DMAT account can prove advantageous, but it is most certainly not a mandate for mutual fund investment. Mutual find investments can be made without a DEMAT account.
It is hoped that the above section has managed to debunk all your myths associated with mutual fund investment. If you have some more doubts, you can always get in touch with a mutual fund consultant in Pennsylvania to get all your doubts, concerns, queries and issues resolved in the most effective manner.