Financial planning means taking a comprehensive look at the financial situation and making up a specific financial plan to reach the goals. Thus, the area of financial planning is quite vast. It often delves into several areas of finance, such as investing, managing taxes, savings, retirement, etc.
Mutual fund means a professionally-managed investment scheme which is usually run by asset management company which brings together a group of people and invests money in stocks, bonds and some other financial securities. To be precise, a mutual fund company helps in pooling money from a range of investors and then invest the amount in different asset classes.
A mutual fund is an investment scheme where a group of people pool in their money to be managed by a professional fund manager. The fund manager invests this money in different securities like stocks, bonds, and other assets, depending on the objective of the fund. Mutual fund investors get the benefit of professional money management, as most fund managers are experienced and have a good track record.
Mutual funds offer a variety of schemes with different investment objectives, so investors can choose a scheme that suits their needs. However, mutual fund investments come with some risks, as the value of the fund units can go up or down depending on the performance of the securities in the fund portfolio. Also, investors should be aware of the fees and charges associated with mutual fund schemes before investing.
Each person who has invested their money into the fund gain ownership over a part of the fund, known as a unit. We can also say that the entire fund is subdivided into multiple parts known as units. So, when a person wants to invest in a fund he has to buy these units.
Investing in shares exposes the risk of the particular company, hence it’s more risky. Whereas in mutual funds, the risk is mitigated with the help of a bouquet of diverse stocks. A common dilemma which all the prospective investors have, is to choose which one is the better. The fact remains that both these avenues are distinctive from each other. One must choose which suits risk appetite and financial goals.
Financial services are referred to a broad range of specific activities including banking, investing, and insurance. Financial services consist of activities related to financial services firms and their professionals, while financial products are referred to actual goods, accounts, or investments they offer.
Each of the available investment avenues has its own characteristics and it depends upon the investor as he/she can decide where to invest money and utilise investment vehicles to achieve financial goals. Financial investments can be made by first understanding the investor’s risk appetite and financial targets. Accordingly, investments can be made in varied investment tools such as insurance plans, mutual funds, FDs, PPF, stocks, PMS, Alternate investment funds, etc.
The need to have a financial advice arises when you think there is a need to manage your wealth and other personal money matters. Financial counselling is required when you have a long-term financial goal and want to start saving for it early. Financial advice is very important to have when you are left with surplus money.
Investing needs saving money, investing it, and finally developing diversified portfolio which is focused on long term. Process of investing needs to be followed in a disciplined way for the long-term wealth creation. Investing should be done according to the risk tolerance and by keeping in view the long-term financial target.
Investments are referred to the products which are purchased with the expectation that such products will eventually lead to income or profit, or both. Investments can be classified as three types: Ownership investments, like stocks or real estate, cash equivalent investments, and lending investments.
Investing journey gets started by deciding which type of investor you want to be. At the time of opening a brokerage account, broker will ask about the investment goals and what level of risk you can take. There are investors who want to take an active hand in managing money’s growth, while others tend to “set it and forget it.”
Investments can be done for both short term and long term. While some individuals think for short term, mostly, investments help in building wealth only in the long term. However, investments should be done after careful consideration of the investment horizon.
Whenever the company decides to list its shares, it considers floating an initial public offering (IPO). First time a company provides its shares to the public, it is called an IPO.
There is no particular amount which can be considered as an ideal investment amount. All the investments should be done after analysing the risks involved in making a particular investment.
A mutual fund (MF) is referred to a collective investment vehicle which collects & pools money from several investors and invests that money in equities, bonds, government securities, money market instruments, etc. Mutual funds can be of different types including open-ended funds, closed-ended funds, equity funds, hybrid funds, etc. For more information, please contact us!