Normally people will invest either in very safe Investment i.e FD with Bank or very Risky Investment i.e share market, chit funds etc. Mutual fund is one which gives a wide range of options to customers to choose between Reward Vs Risk. Mutual funds are managed by professional fund management company, wherein they invest both in Government bonds and equity.
Before you choose between own investment vs Mutual funds please read these para,
As an investor, you can either manage your finances yourself, or hire a professional firm. You opt for the latter when:
1. You do not know how to do the job best – many of us hire someone to file our income tax returns, or almost all of us get an architect to do our house.
2. You do not have enough time or inclination. It’s like hiring drivers even though we know how to drive.
3. When you are likely to save money by outsourcing the job instead of doing it yourself. Like going on a journey driving your own vehicle is far costlier than taking a train.
4. You can spend your time for other activities of your choice / liking
Professional fund management is one of the best benefits of Mutual Funds. The infographic on the left highlights all the others. Given these benefits, there is no reason why one should look at any other investment avenue.