Siby Varghese is without a doubt the most phenomenal trader in today’s modern era. Known in most circles as a quant fund and hedge fund manager, Siby has a wide spectrum of achievements under his belt. One key thing Siby points is that don’t confuse luck with brains and don’t anticipate you’re smart because you got lucky.
As a professional and seasoned trader Siby Varghese construe the importance and benefits of early investment in mutual funds.
A mutual fund is a form of a financial vehicle made up of a pool of money raised from several investors to invest in securities such as stocks, shares, money market instruments, and other properties. Car enthusiasts swear by the excitement of driving, which symbolizes the flow of life. Investing is the same thing as driving. The flow of money brings a thrill in the form of a return. If you’re looking to move forward in life, it’s important to keep going, and mutual funds will help you drive your returns.
A lot of people love to drive, but when it comes to investing, some driving enthusiasts tend to park their funds in low-return items such as fixed deposits or even savings accounts. It is a myth that fixed deposit parking funds will hold the money safe. Inflation is undermining the value of capital when taxes are reducing returns.
Mutual funds are run by experienced portfolio managers who distribute the assets of the fund and aim to create capital gains or profits for the investors of the fund. The portfolio of the mutual fund is structured and managed to meet the investment objectives.
Mutual funds offer small or individual investors access to professionally managed portfolios of stock, government securities. Accordingly, each shareholder shares proportionately in the gains or losses of the fund. Mutual funds invest in a large number of stocks, and success is typically monitored as a decrease in the Fund’s overall market cap — the product of the aggregated performance of the underlying assets.
Benefits Of Mutual Fund
These are some benefits of mutual funds: –
The flexibility of investors
Mutual funds are mainly of three types i.e. Equity, Debt, and Hybrid funds. Different investors choose various types of funds according to their risk profile. The amount of risk will certain the returns.
As you invest in mutual funds, you broaden the investment that minimizes the risk of being impacted by a slump in a specific asset or industry. With a varied portfolio, you can live a stress-free lifestyle without thinking about market volatility.
Mutual funds are administered by experienced fund managers who have access to key financial data and perform extensive analysis before investing. A team of researchers is helping fund managers to make investment decisions. Compared to a layman, skilled fund managers have a smaller risk of making incorrect investment decisions.
One can invest as little as Rs 500 per month in a mutual fund. Systematic investment plans enable participants to invest small sums regularly to create a corpus over time. In addition to the SIP, you also have the option of investing a lump-sum amount in mutual funds.
The typical mutual fund holds over a hundred different securities, which means that the shareholders of the mutual fund benefit substantial diversification at a low price.
Siby Varghese demonstrates this with an example:
Consider an investor who just buys Google shares until the company has a poor quarter. He’s expected to lose a lot of value because all his dollars are tied to one company. On the other hand, a different investor could purchase shares of a mutual fund that is owned by some Google stock. If Google has a poor quarter, it loses much less because Google is only a tiny part of the fund’s portfolio.