Introduction to Mutual Funds
Mutual funds are often a term many people misunderstand and thus fear as most of the newspaper headlines focus on the bad side of the Mutual Funds. In spite of many public awareness advertisements, Mutual Funds still remain a topic left untouched and unexplored.
Mutual funds, as the term itself suggests, can be broken into two words. “Mutual” meaning two or more parties and “Funds” meaning money. As the stock exchange goes, where companies put up their Shares for the public to purchase there, in turn, giving the company money for its activities. Mutual Funds refers to when two or more parties pool their money together and buy stocks of a particular company. Mutual Funds investors enjoy profit and losses as according to their share meaning as a proportion to the money they decided to pool together along with other parties. Under Mutual Funds, any participating parties can withdraw their money whenever they wish to do so.
Invest in Mutual Funds Online can be a risky procedure and yet it yields very great results. As it implies one or more parties pooling in their together for a particular commodity, it entirely opens door to Tax evasion. In Tax Saving Mutual Funds, through the scheme of ELSS or Equity Linked Savings Scheme, parties can indulge while hiring a Mutual fund's Financial Adviser and also devising a Systematic Investment Plan to better get results.
Invest in Mutual Funds Online.
Various companies offer the services to allow the participants to invest mutually i.e. take part in Mutual Funds Investment Online. However, many documents are to be signed and read carefully before doing so. As Investing in Mutual Funds online can be risky and is always subjected to the Stock Exchange market, unlike any other stock exchange where profits and losses are shared by an individual alone, in Mutual Funds Online Investment all the losses and profits are shared proportionally to the amount of money pooled in.
In order to start investing in mutual funds, a party has to complete few sets of forms to ensure their consent to investment and also attach few documents which may also include:-
1. PAN card / Voter ID ( Identity proof)
2. KYC (Know Your Customer)
3. Passport (Address proof)
4. Driving Licence (Address proof)
Advantages of Mutual Funds Online
Online Mutual Funds Investment is subjected to market risks but as the losses are proportionally shared by amount of money each party individually pools in, the loses are minimized to a great extent. Online Mutual Funds Investment can be a great source of income and many people have made it their main source of live hood. Through a properly hired Mutual Funds Advisor, the participating parties can analytically invest and keep track of their Investment in Mutual Funds Online.
However, due to the recent introduction of the Systematic Investment Plan, which allows the parties taking part in the Mutual funds investment, to invest in small amounts rather than having a big amount deducted from their pockets. The Systematic Investment Plan has drastically reduced the losses suffered by the parties.
1. He is often inaccessible
2. There are many scams related to the Mutual Funds Financial Advisor, so proper background check should also be ensured.
3. According to many reports, many people have reported frauds so a trustworthy Mutual Funds Financial Advisor is to be selected.