5 Mutual Fund Myths Busted

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The following are top 5 mutual fund myths busted for your clarification:

1. There are no short-term profits in Mutual Funds

While it’s true that mutual funds offer excellent long-term profits due to inflation-adjusted returns, they can offer short-term profits too. For instance, investments in short-term money market securities can be a good option for the same.

2. Having a Demat account is mandatory

Many people invest in mutual fund schemes through a Demat account (which is opened when registering with a broker). However, you can also invest by directly buying funds from fund houses or through distributors.

3. You need to an expert to get returns through mutual funds

Contrary to popular belief, you don’t have to be a finance expert to make profits through mutual funds. The fund managers are experienced individuals who do thorough research and planning before investing the money on your behalf.

4. You must have a lot of money to invest

You don’t need to be super rich to invest in Mutual Funds. In fact, anyone can invest in mutual funds, with an amount as small as Rs. 500 or Rs. 1000.

5. Mutual Funds don’t require work

You can’t just invest in Mutual Funds and forget about it. To increase your chances of high returns you must monitor the market and alter your portfolio accordingly from time to time.
Mutual funds, just like most other kinds of investments, can deliver excellent results. However, it’s important to know the basics and apply the knowledge when making the decisions.