Mutual funds in India
A mutual fund is like a big piggy bank where lots of people put their money together to buy a bunch of different things like stocks, bonds and other investments.
In India, there are many companies that manage these big piggy banks and let people invest their money in them. For example, let's say you have Rs. 100 and you want to invest it in a mutual fund. You can choose a mutual fund company that fits your investment goals and risk tolerance, and hand over your Rs. 100 to them.
Once you and many other people invest your money in the mutual fund, the fund manager will buy different investments like company stocks, government bonds, etc. with the collected money. The idea behind this is that when the value of the investments goes up, you get a share of the profit in proportion to the amount you invested. And when the value goes down, you may lose some of your money too, but only a little bit because the risk is spread across many investments.
Basically, mutual funds are like a team sport where everyone pools their money together to invest in different things and share the wins and losses. But remember that past performance can't guarantee future results, and it's important to do your research before investing in any mutual fund.
In India, there are many companies that manage these big piggy banks and let people invest their money in them. For example, let's say you have Rs. 100 and you want to invest it in a mutual fund. You can choose a mutual fund company that fits your investment goals and risk tolerance, and hand over your Rs. 100 to them.
Once you and many other people invest your money in the mutual fund, the fund manager will buy different investments like company stocks, government bonds, etc. with the collected money. The idea behind this is that when the value of the investments goes up, you get a share of the profit in proportion to the amount you invested. And when the value goes down, you may lose some of your money too, but only a little bit because the risk is spread across many investments.
Basically, mutual funds are like a team sport where everyone pools their money together to invest in different things and share the wins and losses. But remember that past performance can't guarantee future results, and it's important to do your research before investing in any mutual fund.