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Why should I Invest in Equity Mutual Funds ?

Which type of investors can choose to invest in Equity Mutual Funds?

Equity Mutual Funds are more suitable for investors who wish to create wealth over the long term and have a high-risk appetite. Depending on the risk-taking ability of investors, they can choose from a variety of options while investing in Equity Mutual Funds such as Large Cap Fund, Mid Cap Fund, Thematic Fund, etc.

What is the right time to invest in Equity Mutual Funds?

For a retail investor, it is difficult to time the markets as it can be influenced by various factors like market risk, political events, global scenarios, and so on. Since markets tend to move in cycles, you can take advantage of these movements by investing regularly. After evaluating your investment profile and needs, it is important to invest in quality Equity Mutual Funds for the long term.

Should I choose Equity Mutual Funds for long-term wealth creation?

Yes. Equity Mutual Funds can get affected by market fluctuations during a short period. Hence, it is advisable to invest regularly in Equity Mutual Funds over the long term to build wealth.

What are the routes of investing in Equity Mutual Funds?

You can invest in Equity Mutual Funds via a Systematic Investment Plan (SIP) or Lumpsum route depending on your choice and requirements. As the name suggests, lumpsum investment is an option where investment in a mutual fund is made at one go. Whereas, a SIP investment involves investing small amounts at regular intervals.

How much should I invest in Equity Mutual Funds through Systematic Investment Plan (SIP)?

While investing in a SIP, you can start with an amount as low as Rs.500 depending on your financial goals which can be gradually increased over a period of time, in line with your requirements. The ease of investing small amounts makes it an ideal pocket-friendly investment tool that could grow into a sizeable corpus in the long term.

Do all Equity Mutual Fund Investment have tax benefits?

No. Only investments in Equity-linked savings scheme (ELSS) are eligible for tax deductions up to Rs.1.5 lakhs per annum under Section 80C of the Income Tax Act, 1961, as per laws of FY 21.

Is it safe to invest in Equity Mutual Funds?

There is no safety associated with investing in equity mutual funds as there is a possibility of loss of capital, however, if you choose to remain invested for the long term it could provide you with relatively better returns and mitigate the risk as compared to investing for a short period of time, which is generally affected by market volatility.

How do I start my Equity Mutual Fund Investment?

The first step is to ascertain your investment profile such as your investment goals, risk-return appetite, and time horizon. This will help you to select an Equity Mutual Fund scheme suitable to your investment needs. Your financial advisor will guide you to fill in the KYC (Know your customer) documents necessary to initiate the investment process.

How do I reach my Financial Goals quickly?

Proper planning and disciplined investing will help you to systematically achieve your financial goals. Depending on your financial needs, you should invest an appropriate amount regularly to benefit from the power of compounding which will help you to generate wealth in the long term and eventually reach your financial goals. Investment in mutual funds scores over traditional avenues in the long term as you have the flexibility to choose a scheme in line with your risk-return appetite and it has the potential to provide higher returns over the long term.

For how long should I invest in Equity Mutual Funds?

Investment is a continuous process as long as you have surplus funds to invest and endeavor to achieve your goals. Investment in Equity Mutual Funds should be considered at least for a duration of 5-7 years to help reduce the risk of market volatility.