Alok Kumar Agarwal of Alankit: Mutual Funds as the Safest Equity Investment
According to a recent report by the Association of Mutual Funds in India, the average assets under management (AAUM) of the Indian mutual fund industry reached ₹40.04 lakh crore in March 2023. This shows the growing popularity of equity investments, especially after the Covid-19 pandemic.
There are several benefits to investing in mutual funds. One major advantage is diversification. Diversification means spreading your investments across different assets to lower the risk. When you invest in a mutual fund, you're putting your money into a portfolio of stocks or bonds from various companies, which helps reduce risk compared to investing in just one stock or bond.
"Investing in a mutual fund through a Systematic Investment Plan (SIP) is the best option for new investors. Starting with an index fund is a safer choice since it has lower volatility. However, investors must be prepared for market ups and downs when investing in equities. That’s why I recommend long-term investments, as they allow you to benefit from compounding," explains Alok Kumar Agarwal from Alankit.