Busting 7 Myths About Mutual Fund Investment In Delhi

Published: 2025-02-24
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Author: anytime
Published in: Finance

People often misunderstand mutual fund investments because they don’t fully understand how they work. These misconceptions stop many investors from making informed decisions and taking advantage of the benefits mutual funds offer. Let’s uncover seven common myths about mutual fund investment in Delhi and see what the reality is.

Myths and Facts on Mutual Funds

Myth 1: Mutual Funds Are Only for Experts

Reality: Many people believe that investing in mutual funds requires expert knowledge of the stock market. This is not true. Mutual funds are designed for all types of investors, including beginners. Fund managers handle the investment process, making decisions on behalf of investors. All you need to do is choose a fund that aligns with your financial goals and risk appetite.

Myth 2: Mutual Funds Guarantee Fixed Returns

Reality: Unlike fixed deposits or other traditional investments, mutual funds do not guarantee fixed returns. Their performance depends on market movements. However, historical data shows that mutual funds have delivered better returns over the long term compared to many traditional investments. The key is to stay invested for a longer duration and choose funds wisely.

Myth 3: You Need a Large Amount to Invest in Mutual Funds

Reality: This is a common misconception. You can start investing in the best mutual fund scheme for SIP in Delhi, as per your choice with as little as ₹500 per month through a Systematic Investment Plan (SIP). This makes mutual funds accessible to people from all income groups. Over time, even small contributions can grow into a substantial corpus.

Myth 4: Mutual Funds Are Too Risky

Reality: While mutual funds are subject to market risks, they are available in different categories based on risk levels. Equity funds carry higher risks but offer higher returns, while debt funds are relatively stable. Balanced or hybrid funds offer a mix of both. Investors can choose funds based on their risk tolerance and financial goals.

Myth 5: SIPs and Lumpsum Investments Give Different Returns

Reality: Many believe that SIPs and lumpsum investments provide different returns. In reality, the returns depend on market performance. SIPs help average out market fluctuations by investing consistently, whereas lumpsum investments may benefit when markets are low. Both strategies have their advantages, and the choice depends on your financial situation.

Myth 6: Mutual Funds Are Only for Long-Term Investors

Reality: While long-term investments usually yield better results, there are mutual funds suited for short-term needs as well. Liquid funds and ultra-short-term debt funds are ideal for parking surplus funds with better returns than savings accounts. So, mutual funds are not just for long-term investors but also for those with short-term financial goals.

Myth 7: You Can’t Withdraw Money Anytime

Reality: Many believe that mutual funds lock in their money for years. While some schemes like ELSS (Equity Linked Savings Schemes) have a lock-in period of 3 years, most mutual funds offer easy liquidity. Investors can redeem their units anytime, and the money is credited to their account within a few business days.

Conclusion

Mutual fund investments across India are an excellent way to invest in the long run. However, myths and misconceptions often prevent people from taking the first step. By understanding the realities behind these common myths, investors can make more confident and informed financial decisions. Whether you’re a beginner or an experienced investor, mutual funds offer opportunities for everyone. Start investing today and let your money grow wisely!