Mutual funds are popular investments because they offer a cost-effective and efficient way to diversify your investments (or own a variety of securities — stocks, bonds, etc.) without having to make a large initial investment.
When you purchase shares of a mutual fund, you’re pooling your money with other investors and letting the mutual fund (which is simply a professional money management company) invest and manage the money to help meet the fund’s specified investment goal (e.g., growth, income, or a combination of the two).
Investing in Mutual Funds
Because they are professionally managed and offer diversification with generally a small initial investment, mutual funds can be suitable for most investors.
Your Financial Advisor has the tools to help you choose the right fund or basket of funds to meet your unique goals. Work closely with your Financial Advisor to develop a mutual fund portfolio that’s suitable for your specific situation.
Systematic Investment Plan (SIP) is an investment vehicle offered by mutual funds to investors, allowing them to invest using small periodically amounts instead of lump sums. The frequency of investment is usually weekly, monthly or quarterly.
A lump sum amount is a single complete sum of money. A lump sum investment is of the entire amount at one go. For example, if an investor is willing to invest the entire amount available with him in a mutual fund, it will refer to as lump sum mutual fund investment.
Debt funds are mutual funds that invest in fixed income securities like bonds and treasury bills. Investing in debt funds is better than saving bank account; keeping hard earned money for a longer duration will attract higher returns than any saving bank interest.