Top 10 Fact of Mutual Funds and Long Term Investments

As of now there are defined protocols to  define for a long-term investment, similarly widely used concept as  any investment plan that exceeds 5 years can be considered a long-term investment.

One of the best and simplest form of investment to.any type of income whether it can be a business man or salaried ,Mutual fund schemes provides an platform for the investors on flexibility to invest as per their needs and perspectives on money to be invested for the short-term, medium-term, and long-term. Similarly  investments in Mutual Fund schemes, especially Equity Funds, are wise long-term investments because they are most likely to generate higher returns than other fixed-income investments over time. The benefits of investing in Mutual Fund schemes for the long term are:

• Managed Risk

Over the long term, market ups and downs may get may have met the equilibrium and have reached a certain level,. This may reduce the risk of investment and may have the potential to generate higher returns than any other investment option.

Nifty and BSE Index Long Term Charts

• Professional management

You can benefit from the professional management of your money in the long term. Investing in the Mutual Funds scheme means you do not have to keep track of the market and leave your investment in the hands of trusted professionals.

• Tax benefits

If you invest in an Equity-Linked Savings Scheme (ELSS), you can reduce your taxable income by Rs. 1.5 lakh per annum for the highest tax bracket of 30% U/S 80C of the Income Tax Act, 1961. (As per prevailing tax laws) and, in turn, help you save up to Rs. 46,800 in taxes* each year.

• The power of compounding

Investing in a Mutual Fund scheme will help you take advantage of the power of compounding through reinvested returns and dividends. This may help you build wealth in the long term.

Let’s consider this with an example:

Say, you choose to invest Rs 25,000 per month in a Mutual Fund scheme for 15 years and 30 years respectively. Moreover, you opt for the SIP mode which is a method of investing in mutual fund schemes regularly. 

Take paper and pen to list down your requirements and needs for future goals, like children education , marriage or buying house.

Ensure that your investment goal and risk appetite into consideration before choosing the right fund to invest in for the long term. Evaluate the long-term performance of the fund, the investment strategy, and portfolio diversification. 

Mark for 

Check the performance of the fund from time to time to ensure it is meeting your expectations.

 Try to research on few selected funds and their fund managers .

Check for sectors considered for invested in the given funds.

NSE

NOTE:

*The old tax regime allows you to save tax on investments up to Rs.1.5 lakh per annum, under Section 80C of the Income Tax Act, 1961. 

However, you will not be able to claim such a deduction if you opt for the new tax regime.

Mutual Fund Sahi hai