Equity Mutual Funds - The best vehicle for wealth creation in the long term

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Investor Information Series  

     Equity Mutual Funds - The best vehicle for wealth creation in the long term

 

The investment options available before a retail investors are  1) Fixed Deposits/Bonds  2) Equity Shares   3) Mutual Funds.

 

Fixed Deposits/Bonds offers around 9-10% with safety.  They are wealth protectors, but not wealth creators.

 

Equity Shares can certainly create wealth provided you have time, knowledge, effort and enough money to invest. This is not possible for many individual investors with limited resources.

 

This leaves "Equity Mutual Funds" as the only option for long term wealth creation. It is so because of the following reasons,

 

Diversification : Investing in Equity MF is like buying shares in many companies. The risk is adequately spread out.

 

Professional management : In a MF, money is managed by a professional money manager with more knowledge and lot of expertise.

 

Affordability : Minimum investment amount is as low as Rs.5,000/-

 

Liquidity : MFs can be redeemed and converted into cash at any point of time.

 

Convenience : Investing in MF has become very easy now. You can simply buy MFs through our NSE terminalslike buying shares. The traditional application form route is also available.

 

Taxation : No Income Tax on Dividends. No tax on Long Term Capital Gains. No Wealth Tax.

 

Invest in Equities....But, through Mutual Funds....Minimise the risk ....Create wealth in the long run....