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A demat account is necessary for stock market but not required for mutual funds including SIP. For investing in Mutual funds you need to submit your KYC documents. If you are interested in investing in stock market or mutual funds,
No. Stock Market Investments (Mutual Funds as well) are not covered by federal insurance. It covers only bank deposits
Everyone benefits from mutual funds. Investors gain from these funds because they stand to reap the benefits of investing in the stock market. The stock market benefits because there are more people investing in the stock market. The economy benefits because there is more money in circulation which is good for the overall economy of the country.
No all Mutual Funds are high risk. MF's that invest in equities and stock market instruments are high risk because, the profit or loss created by the mutual fund is directly dependent on how well the stock market performs.
Yes they are. Since mutual funds invest in the stock market they carry the same risk that stock market has. If the price of stocks tumbles due to some reason, the value of a mutual fund goes down and hence our investment worth also goes down. Certain type of funds like debt funds and balanced funds do not bear the brunt of a stock market collapse but they suffer losses too, during an economic crisis.
Because mutual funds are stock marketinstruments and stock market investments cannot be insured. A stock market is unpredicatable and can go either way and hence insurance companies do not provide coverage against losses incurred in the stock market. That is why all mutual fund houses say:Mutual fund investments are subject to market risks. Please read the offere document carefully before investing.
No they are not. Mutual funds are stock market investments and hence they are not insured. There is always a possibility of an investor suffering a loss if the mutual fund house makes wrong investment decisions.
Because not many investors know how to track the stock market and choose stocks effectively. That is why they prefer Mutual Funds where an expert fund manager does this on our behalf
Yes, many products can provide a broad based exposure to the stock market. These include index funds on major market indices, broad based mutual funds and Exchange Traded Funds (ETFs) among others.
There is no mandated need to invest money in mutual funds. It is upto the individual to decide as to whether he wants to invest in them or not.Mutual funds are good investment instruments for investors who do not have the time or expertise to invest in the stock market but at the same time want to take advantage of the returns given by the stock market
equity shares are stock market instruments that represent ownership. A person holding 10 stocks of XYZ limited owns a small % of the XYZ company. mutual funds are stock market instruments too but they invest in the equity shares that is explained above.
Yes they are. Bonds are debt obligations and hence the person who owes the debt is supposed to pay the money back and our money is much safer than what it is in a stock or mutual fund. Since stocks and mutual funds are related to the stock market they have an inherent risk wherein we can lose money if the market collapses.