If you do not want to take the risk of dabbling in individual stocks and firmly believe that equity investments is one sure way of beating inflation and building wealth for long-term, Equity Mutual funds which are managed by professional investors is the right choice for you.
What is Equity Mutual fund?
Equity Mutual Funds typically have more than 70% of the fund invested in stocks, most of them hold any where between 30 to 50 stocks. There are several types of Equity Mutual Funds, ranging from large cap to mid cap/small cap and sector based funds. It is managed by professionals who has expertise in assessing the balance sheets and access to market research in related areas. Mutual fund managers also follow various checks and balances including not any individual stocks exceeding say X% of portfolio and buying stocks across sectors, so that performance is well-balanced and risk is minimized.
Which fund should I buy?
While there are hundreds of funds which invest in stocks, fund choice is entirely dependent on the risk profile and time period for which you are looking to invest. Typically Continue reading