Equity & Mutual Fund investments are the best investments over a long period of time. The growth of share prices comfortably outgrow the growth of inflation because the best share prices represent the growth in earnings of the best companies. Although the stock market is seen as “High Risk” this depends very much on timing and the sort of shares invested in. Direct share investment is not suitable for everyone, because many simply do not have the time and knowledge.
Mutual fund options are available that give returns roughly in line with market averages and these are by far a superior investment for those that do not wish to make investment their profession. There is no need to be afraid of stock market, it does not crash without reason at any random time. If you choose to ignore stocks out of fear of market downturn, you ignore the best available investment option.
Today, mutual funds have become one of the foremost investment instruments for a large number of small investors in the country. According to the Association of Mutual Funds in India (AMFI), mutual funds are the most suitable investment for the common man. A mutual fund generates market returns for investors by enabling them to utilise the skills and resources of a fund house/asset management company. It provides an investor with an opportunity to diversify his/her portfolio at a relatively low cost, besides some taxation benefits.