FinCalC: What Are MUTUAL FUNDS? Basics Of MUTUAL FUNDS Explained with Example[VIDEO]

Confused about Mutual Funds? What are the things you should know about Mutual Funds, READ & WATCH to know more...

Many Indians are still confused about the term Mutual Funds. What is it? How it works? What if I lose all my money?
In this post, we will see What are Mutual Funds, How Mutual Funds Work and an Example of one of the Old Mutual Funds available, with the help of a VIDEO.

Before getting started, Download our FREE Calculator Android App(FinCalC) for Financial Planning and Calculating Income Tax:

Download FREE Calculator - FinCalC

What Are Mutual Funds?

Mutual Funds are Professionally Managed Investment Funds that pull Money from several Investors to invest in Stocks of several different companies. That means, when we say we are Investing in Mutual Funds, it is same as investing in Stocks of different Companies, the selection of which is done by Mutual Fund Manager.

MUTUAL FUNDS vs STOCKS?

Stocks               : Investing in One Company 

Mutual Funds    : Investing in Several Different Companies

Since there are Stocks of several different Companies that come into picture while Investing in Mutual Funds, there is a very less chance of losing your money if any of the listed company doesn't perform well (since there are other companies that are performing well!). This method of Investing in several different Companies is called Diversification.
Whereas, while investing in Stocks, if the Company is not performing well for a short duration of time, the Investor might lose their money (only if the Investor decides to sell).

How MUTUAL FUNDS Work?

There are several Mutual Funds out there in today's date. Selecting a Mutual Fund based on your Goals is NOT very complex. 

For every Mutual Fund we have something called as Fund Manager, who along with his / her Team, select the Stocks of Companies that they are going to invest in. Based on their analysis and performance of different Companies, they either hold / sell required Stocks to maximize Returns.

In this way, Investors needn't have to select Stocks to invest in, which is done by the Fund Manager and his Team. Investors just need to select appropriate Mutual Fund and let the Fund Manager and his Team do their job to maximize Investor's Returns.

Watch VIDEO and check out an EXAMPLE of Mutual Fund Returns:

YouTube Channel - CLICK HERE

Follow this Blog and our YouTube Channel for more updates on Financial Planning. Also, DOWNLOAD FinCalC APP - our FREE Android Calculator.

Feel free to comment in case you have any queries. Stay Tuned.