Investment in stocks as well as mutual funds highly depends on the amount of time you have and can devote to investment.
Investing in stock market requires a lot of knowledge and experience. You need to devote time for learning and knowing the way thing are. A lot of people just watch TV and read newspapers and think that they have sufficient knowledge about it and can start trading/investing and earn huge sums of money within a short period of time. The hope to earn huge profits and become millionaires within a very short span of time. Let me tell you one thing - there is no short cut to this. You have to strive day and night for learning, experimenting, amending your mistakes and gaining experience to emerge successful.
Stock market is not a money generating tree from which you can easily have the fruits. It is like chess; after the first four moves in chess there are more than 300 billion combinations that can occur. Or it can be compared to cricket; even if you are the God of cricket(Sachin Tendulkar), you are bound to make a mistake and get out. Sachin Tendulkar can be the best in the world but he can never be above cricket. This is the truth we all need to inculcate in our minds.
Those who tell you they earned a huge amount of money within a very short period of time by showing you screenshots of their profits are either trying to dupe you or convince you for their own benefit. They might be hiding their losses you never know. You only know what you have seen. Don’t fall in these traps if you are a horse of a long race.
A fortune that you dream of or have been dreaming from a very long period of time cannot be achieved within days or even months for that matter,however, if you are really devoted and determined to learn before investing, you can definitely achieve that goal within some years.
Overall, if you have time to devote for learning, there are a lot of sources available on the internet and are a lot of good trainers who might help you with it. You just have to find the genuine one because due to the surge in the market nowadays, there are a lot of fraud companies trying to sell their services. Don’t get trapped in their nefarious schemes and lose your money. You can start with google and YouTube if you are a beginner.
On the other hand, mutual funds are managed by a fund manager of an Asset Management Company and you have no role to play in it. You just have to invest money into it and wait. Generally, decent Mutual funds with a good overall management generates up to 25% returns annually(which is almost 4 times that of FDs and RDs). The first year of many mutual funds may be quite lucrative up to 50–60% annual returns but if you average the returns of them for many years, it would come out to be approximately 25%.
You just have to put money in the Mutual funds every month/quarterly/half yearly(as you wish) and it is done through ECS so you don’t have to worry about anything. Just find a mutual fund distributor to get started with or you can also invest in mutual funds through a Demat account.
As the money invested is not controlled directly by you, you don’t have to worry about a thing. Just invest and relax. Your returns would initially go negative for the first 6–8 months but after that they will most likely turn positive and remain positive unless and unprecedented big market crash occurs. So if you want to play safe and are busy with your daily schedule throughout the day, mutual funds is a good option. Also, don’t expect short term gain from mutual funds. Aim for long term.
Remember:- Investment in knowledge pays the best interest.
BY ABHIRAM DAPKE
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