SHARETIPSINFO >> Articles Directory >>Planning a mutual fund portfolio
We have all heard about the mutual funds, which is growing bigger and bigger with every passing day. So much so that it has, already started taking up the investment world to and as such, the day is not very far when mutual funds will just be another name for the investment world. Mutual funds are rising in importance every day and have thus, become one of the hot favorites of the people in the present day. Mutual funds today have grown from being just a simple investment scheme to a large investment vehicle with numerous channels. The rate of growth of mutual funds is much more than the growth of the share market in all these years put together. As such, it goes without saying that more and more people are being attracted towards the mutual fund schemes; and are investing in it too. Now, before we go into the more detailed description and the more complex terms regarding mutual funds, like how to choose a mutual fund scheme or which mutual fund scheme we should choose, or about planning a mutual fund portfolio; let us in general learn about the meaning of the term mutual funds at first.
About mutual funds
When put in plain words mutual funds refer to the collective investments of those classes of people, or small investors, who neither possess the skill nor the expertise knowledge nor have the time to invest their money in the stock market. The classes of people mentioned above are especially the small savers who do not have enough resources to invest in the online stock market. One salient feature and the greatest advantage of the mutual fund, which distinguishes it from the stock market, is that unlike stock market, anybody and everybody can invest in the mutual funds. Thus, in other words, in order to invest in the mutual funds you do not have to fulfill any specific criteria.
With this increasing growth of the mutual funds, certain problems have evolved too
However, of late it has been seen that with this increasing growth of the mutual funds, certain problems too have evolved. Although at present there is nothing much to worry about these problems, as they do not fall in the category of severe problems, neither are these problems similar to the ones that a person may face in the stock market but these are rather decision making problems. There are so many aspects of a mutual fund, that it becomes difficult for us, at times, to decide which is better. Again, another problem that people face now days is the increasing number of mutual fund schemes. There are so many mutual fund schemes that you do not know which one to choose and which to not. Again, so many more mutual fund schemes are still being introduced with every passing day that it becomes all the more difficult for us to decide.
The stock market is gradually losing its old charm
Thus, it would not be wrong on our part to say that the stock market is gradually losing its old charm and all thanks goes to the mutual funds. The term mutual funds have been growing at an unprecedented rate all throughout the world. So much so, that it has successfully surpassed all the other investment options and has now almost gone beyond the stock market as well. Its rate of growth is so high that within a few years time it has been successful in outnumbering the total number of listed companies in the New York Stock Exchange (NYSE) itself. Thus, with the above mentioned facts and figures, you can now well understand the rate at which the mutual funds are growing all over the world. These rates of growth of the mutual funds are such that it has posed serious threat to the other investment option as well as to the stock market also. More and more people today are being drawn towards the mutual fund and as such, the value of the stock market has, today taken a set back. Thus, today it is important that you learn about planning a mutual fund portfolio
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