It is a trust that collects money from a number of investors who share a common investment objective. Then, it invests the money in equities, bonds, money market instruments and/or other securities. Each investor owns units, which represent a portion of the holdings of the fund. The income/gains generated from this collective investment are distributed proportionately amongst the investors after deducting certain expenses, by calculating a scheme’s “Net Asset Value or NAV.
Simply put, a Mutual Fund is one of the most viable investment options for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
The most important aspect is to start investing early, even if small, and gradually adds on to your investments as your earnings increase. This gives you better prospects of better returns in the long run.
WHY INVESTING IS BETTER THAN SAVING?
Saving = Money is Idle
Investment = Money makes more money
Saving is very essential for investing, hence saving is necessary but investment is important to achieve long term goals