Mutual funds are the collection of money that is gathered by several investors and is then put to a combined investment in stocks, bonds, and other types of securities. It is a good option to consider if you do not have much idea about what to do with your money. The money collected from various people is managed by a money manager or a funds manager, who tries to earn profits from the principal amount. The profit or loss incurred is divided proportionately between the investors after the end of the period.


The best thing about mutual funds is that anybody can invest in it. There is no age limit whatsoever. You can even invest in the name of a minor child, having an age less than 18 years. This can go up to any age, as long as you live. Hence, there is no age restriction. Also, it does not require you to open any DEMAT account unlike for stocks trading or your generic investing. However, here we are discussing a few categories in detail –


Salaried employees can invest in mutual funds in the form of small savings from their salaries through SIP (Systematic Investment Plan). There are several equity mutual funds available for the salaried employees which are different from the regular funds. Some of these plans offer great returns per annum. This is because the majority of the equity is invested in large-cap stocks hence, this could be considered a somewhat safer option. To get the above-average results you might want to consider investing for a period of 5 years or more maybe, even though short-term plans are also available. They can look at some of the best multicap fund to invest in 2020 which can act like diversification.


Businessmen, whether they are big or small can always consider the option of investing in mutual funds. This can be done through SIPs or Lump-sum, whatever they can afford. Investing in mutual funds can always be a great idea for businessmen as it helps them in diversifying their sources of income. They could also make up for the losses they incur in business through mutual funds. Businessmen can also obtain the advantages of the market conditions by investing in mutual funds. That way they do not have to actually engage in businesses and they can choose to exit according to their will. This capital which is created by mutual funds can help businessmen later.


For senior citizens, there are special kinds of funds known as Debt Funds or Liquid Funds. Although they can invest in other forms too, but this fund is considered the best for the senior citizens owing to its conservative approach. This is because the Debt Funds usually require larger amounts of money and have greater returns than bank FDs or your normal savings accounts. Also, the risk involved is quite low in them. Debt funds invest money into the various kinds of bonds like corporate, government, bank etc. Average returns are good and no tax deductions are made on their earnings.


Beginner in savings can start investing in mutual funds at a young age too. This is because starting early helps you in creating an impressive portfolio. Also, the principle of compounding applies here. This means that your money will grow exponentially over the period. You can also invest in policies involving risks as you have time to cover up your losses if any. It is advisable for young investors to adopt hybrid schemes of investing which are a combination of equity and debt. Further, your financial goal and your risk profile will determine the suitable investments for you.


People who have some sort of financial goals but do not have any diverse source of income can choose to invest in mutual funds to earn some extra bucks. These financial goals can be anything like children’s education or their marriage, or your retirement plans or maybe even buying a car. Whatever goal you have, there are specific plans available for each of them. Whether it is a short-term or long-term goal, the specific mutual funds for it will help you to realize your dreams while fulfilling them.

To conclude, one must always remember to view their portfolio from time to time and invest in funds that are suitable for your conditions, your financial goals, duration, and your risk profile.

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