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Why should you choose Mutual Funds instead of Stocks?

Do you have financial goals, but your investment journey has not commenced yet? One of the most prevalent dilemmas first-time investors face while deciding to invest is where to invest and how. When you go online and search for investment options, you will find plenty of options and varied results. Many people are attracted to investing in stocks, especially the ones who want higher returns. While directly investing in stocks does increase your chances of receiving higher returns, stocks have an extremely high-risk quotient as well. The risk quotient being this high makes stocks a crucial option for investors, and especially the ones who are going to invest for the first time or who have a long-term goal. Mutual funds, on the other hand, carry a much lesser risk because of the diversified investment portfolio. A diversified investment portfolio strategically combines multiple assets to alleviate the overall market risk. To comprehend the various aspects of mutual funds and the entire procedure of investment, you should get in touch with an expert. You must find a mutual fund advisor in Mumbai, Pune, or whichever city is the most suitable for you.

Here are 4 significant factors which make Mutual Funds a better option for you to start your investment journey-

1. Diversification:

A mutual fund is an investment that uses the money collected from investors to suffuse in various assets. Due to a diversified investment portfolio, the risk factor in investment reduces to a large extent and thus stands out as an ideal investment option for individuals who are just beginning their investment journey or individuals with long-term goals.

2. Risk & Returns:

As explained in the above point, mutual funds carry lesser risk when compared to directly investing in stocks, etc. This is one of the most consistent reasons for mutual funds to be a perfect investment option.

3. The expertise of a fund manager/consultant:

The most critical factor which makes mutual funds a phenomenal investment option is professional insights, suggestions, and advice through an expert. When you invest in mutual funds, you will have a professional who will guide you through the process, tell you the best schemes to invest in, calculate your risks, and understands your financial scenario. Whereas, when you invest in stocks, you have to do all of the above by yourself, which makes it a more risky option than it already is.

4. Tax Gains & Benefits:

Mutual funds also help investors in saving money that goes into taxes through ELSS, which makes mutual funds an attractive option to many individuals. ELSS refers to an Equity-linked savings scheme, ELSS are close-ended funds with a lock-in period of 3 years and can be invested through SIP as well as lump sum investment options. They provide tax benefits under the new Section 80C of Income Tax Act 1961.

To know more about mutual funds, get in touch with us at +91 96079 00451, +91 96079 00455


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