Alok Kumar Agarwal on Why Mutual Funds Are the Best Choice for Beginner Investors in Equities
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 ₹40,04,638 crores in March 2023. This highlights how popular equity investments have become, especially after the Covid pandemic.
Mutual Fund investments come with several benefits. One of the main advantages is diversification. Diversification means spreading your investments across different assets to reduce risk. When you invest in a Mutual Fund, your money is spread across a variety of stocks or bonds, which lowers the risk compared to investing in individual stocks or bonds.
Alok Kumar Agarwal from Alankit suggests, “For new investors, investing in a Mutual Fund through a Systematic Investment Plan (SIP) is the best way to start. They can begin with an index fund for safety since it has lower volatility. However, investors should be prepared for market ups and downs when investing in equities. I recommend a long-term investment to take advantage of compounding.”