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Risk and return are two sides of a coin Risk and return are two sides of the same coin. With high return comes high risk and vice versa. One needs to take the needed risk to earn the excess return. A person investing in an FD as he thinks is safe but is worried about inflation eating up his returns or a person investing in an equity mutual fund who gives knee jerk reaction to every market move isn’t investing according to their risk appetite. Clearly, the first person is willing to take more risks and the second one isn’t. Understanding one’s own risk profile is very important before they start investing. Also, what may suit one person may not suit the other. Each individual has a different capacity for risk. Just because a person is investing in a low-risk product doesn’t mean the others also have to invest in that. The herd mentality doesn’t work for investing. What is the risk? Risk refers to the degree of uncertainty or potential loss in an investment. As risk increases inves...

A systematic investment plan (SIP) is an investment option provided to investors by many mutual funds, enabling them to invest small amounts on a regular basis, rather than lump sums. Investment level typically occurs regularly, monthly, or quarterly. Through SIPs, investors regularly debit a fixed sum of money through bank accounts and invest in a specified mutual fund. A number of units are assigned to the investor according to the present Net Asset value. Every time an amount is spent, the investors account earns more units. The strategy promises to free the investors by dollar-cost average from speculating on volatile markets. Since the buyer gets more units when the price is low, and fewer units when the price is high, the average cost per unit will be lower in the long run.  SIP appears to be encouraging responsible investment. SIPs are flexible; investors can stop investing in a plan at any time, or choose to increase or decrease the amount of investment. Retail invest...

There have been few developments in the last two years that have given direction to  the mutual fund schemes. It could be the re-categorization of mutual fund schemes by SEBI, the downward trend in midcap funds and small cap funds, to name a few. Mutual funds via SIP, following several such shifts, have always compensated investors in the medium to long term. There are several benefits of investing in mutual fund schemes by SIP. Mid Cap Mutual Funds A mid-cap fund is a pooled investment vehicle (e.g. a mutual fund or ETF) that primarily invests in mid-cap companies ‘ stocks, or firms with market capitalizations ranging from around $2 billion to $10 billion. As the name implies, a mid-cap company falls in the middle of large-cap (or large-cap) and small-cap companies. Classifications such as large-cap, mid-cap and small-cap companies are only approximations and may change over time. Mid-cap funds provide investors with a diverse portfolio of mid-cap firms. Mid-cap stock fu...

The dream of every parent is to make sure that their child gets the best of all. As parents, you’re concerned about your child’s little need, but schooling and marriage are the biggest concerns that you don’t want to compromise on anything. Only by taking a small step towards the future can you be concerned about these issues. Mutual Funds are an excellent way to invest in the future of a child. Before becoming an adult, many parents want to create a corpus for their child so it can be useful for higher education. We also funnel cash from piggy banks, small amounts earned as presents on occasions such as their birthday, win a race, do well in a sport, and so on to mutual funds. There are some mutual fund schemes on the market that provide returns that would provide your children with financial advantages for needs such as meeting wedding expenses, potential educational needs, etc. Its long-term capital appreciation would fall under the Hybrid or Balanced Mutual Funds category. Such ...

Risk and return are two sides of a coin   There are two sides of the same coin, Risk and return. High risk comes with high return and vice versa. The necessary risk to earn the excess return must be taken. A person investing in an FD as he feels is secure but worried about inflation eating up his returns or a person investing in mutual equity fund gives knee jerk reaction to any market change that doesn't invest according to their risk appetite. The first person is clearly willing to take more risk, and the second person is not. Once they start investing, knowing their own risk profile is very important. In addition, what one person may suit may not suit the other. Each individual has a different risk capacity. Just because an individual invests in a low-risk product does not mean that the others also have to invest in it. The mentality of the herd does not work to invest. What is risk? Risk refers to the extent of an investment's uncertainty or potential loss. As the ris...