When you decide to go for an investment with long term goal, you have choices like PPF, Bank FDs, Buying a property, Government Bond, Mutual Funds etc. Today we will tell you why choosing Mutual fund is more wiser decision when you go for a plan of 5-7 year at least. Let’s discuss:
Power of compounding:
Investment in mutual fund actually gains on daily basis, obviously on market days only. But the best part is, your investment also compounds daily, what you gain today adds up with your principal for tomorrow. Thus the returns become rewarding.
When you go for Mutual fund investment in long term, the short term turbulence hardly effects your return. In the period more than 5 years your returns gets a long time to go up with the market and the past trends are the proof for that, so the risk factor what stops investor to invest in mutual fund hardly exist in long term.
Free from Tax liability:
This is indeed the biggest advantage of investing in mutual funds. When you redeem your funds after holding at least 12 months, the returns are completely tax free. In case your gains are more than Rs 1 lakh, only 10% long term capital gains tax will be charged.
You can start with small:
You can’t buy a property with Rs 500, right? But you can start your SIP in mutual fund with Rs 500 per month only! Isn’t it amazing? We know that people normally avoid taking risk, but what if you start with by small its more considerable. When you feel comfortable, just increase your investment amount.
Well, we hope the article has worked on you as a motivation and cleared your doubts. If you are ready and patient enough to get rich or achieve your financial goal, do start investing from today and thank us later.