Where to invest stocks or mutual funds?
Sign Up to our stock-market-based Q&A Platform to ask questions, answer people’s questions, and connect with other people.
Login to IndianStox.com (Q&A Engine) to ask questions, answer people's questions & connect with other people.
Lost your password? Please enter your email address. You will receive a link and will create a new password via email.
Which are safe Stocks or Mutual Funds?
A return on stock/mutual fund investment is a huge money, compared to a regular savings account, FDs, government institutional/private institutional bonds. Then, which is safer to invest? To know about it, follow the information provided below.
First, Download the famous apps of Zerodha, Upstox, Moneycontrol, Angelone discount brokerage companies, and they will give you perfect guidance in their blog corner.
These discount brokerage companies do recommend which company stock is safe to trade, or about a specific mutual fund that helps you in saving tax, and produce good returns on investment.
In brief, their financial experts provide the best solutions and let you understand the safety measures that should be taken in trading stocks or mutual funds.
Equity market advisers provide you with a right direction, and consulting good discount brokers shall give you a correct answer, which are safe, stocks or mutual funds?
Note:
All trading experts do emphasize the fact that you must have the ability to take risk, involvement in risk management, tolerance, patience, and discipline goes hand in hand.
First you must check the merits/demerits of stocks, and mutual funds, and consider the level of risk you should take as per your priorities. You may prioritize health, education, marriage, etc.
You must apply risk management properly which is proportional to your age index.
Younger the age, more the risk bearing capacity you would have, therefore, you must begin investments in younger days of life.
Merits/Demerits of the Stocks and Mutual Funds:
Merits of Stock Markets:
You can benefit from the blue chip stocks which are progressive in nature. As the company’s performance begins to escalate, the shares automatically raise and dividends are issued based on the after tax cut on profits earned.
You can make profits by selling your acquired stocks at a higher price.
You can earn more by making an entry/exit position after making proper technical analysis, and studying the company’s credentials.
Demerits of Stock Markets:
You also have the darker side of stock trading. It is not just earning huge money, you are bound to get your entire money washed away, so be careful and gather information since stock prices fluctuation are based upon.
Keep track of the company performance, financial statements, and business expansions, and favourable news on the company, so on.
You must monitor and regulate your stocks, for that, you must have a thorough knowledge of the stock market trading ecosystem is essential.
Merits of Mutual Funds:
Fund managers do recommend you in buying/selling of the securities based on your preferences and they are the best financial advisors.
Banking institutions like HBSC, ICICI, BOB, AXIS, and so on, do help you manage your funds professionally.
Fund managers do invest your money in a diversified manner that enables you in reducing the financial risk for a stock market collapse.
You can purchase and sell units, at a price that the stock market holds.
A liquidity factor allows you to execute the trade in huge volumes.
Demerits of Mutual Funds:
At the time of units withdrawal you will have to pay huge expenses as compared to FDs, and bonds.
Fund managers provide you with an option to select the portfolio, but give you no control on the asset allocation.
In Nutshell:
Both the securities, stocks & mutual funds have specific merits and demerits, and that is dependent on their market operationality. Therefore, you must make a safe play depending upon your financial ability to invest, age, and other responsibilities.
Is it Safe to Invest in Mutual Funds?
You can notice that the Association of Mutual Funds, AMFI has given permission to 45 mutual fund companies to run 1453 mutual fund schemes as per the statistical date declared on 31 July 2023.
It means that the pace at which the mutual fund schemes are increasing you must invest and stop giving a second thought to MF investments. Below if you follow the tips you can entertain a safe investment in the mutual funds.
Tips to Make Safe MF Investments in India:
Mutual funds are broadly classified based on your investment objectives, structure and asset-class. Moreover, the entire mutual funds in India can be broadly classified into equity mutual funds, debt mutual funds, hybrid mutual funds, and gold mutual funds.
You can make it a safe investment in the above stated fund classifications provided you check for the risk involved that helps you in reducing the losses on the returns.
Equity Mutual Funds:
Certain sectors tend to march ahead and help you in making more money in MF businesses. It can be sectors such as technology, banking, Pharmaceutical, etc.
You must study the stock markets that are progressing well across the market caps such as Flexi Cap Funds, Focused Funds, or Multicap Funds and make an investment to have a safe mutual fund business.
You can make a decent profit with equity funds because SEBI has made it mandatory to invest about 65 % in the equity portfolios.
Debt Funds:
Making your investments based on your age, and financial risk appetite, you can opt for fixed income securities covered under the Debt funds.
The debt funds make an investment in bonds, debentures, and government securities.
Time duration in debt funds do play a vital role, your investment can be of liquid funds, short duration funds, medium duration funds, or ultra-short duration funds.
Further, you can encounter safe mutual fund investment when you go for dynamic bond funds, credit risk, or gilt funds.
Hybrid Funds:
If you aspire to balance your investment risks, then a combination of equity & debt known to be hybrid funds should be sought for.
You can choose these hybrid funds in a category of: aggressive funds, balanced hybrid funds, conservative hybrid funds.
Further, your fund allocation should be in dynamic asset allocation, or multi-asset allocation funds.
Gold Funds:
The SEBI has allowed the mutual fund houses to manage gold and gold related instruments, and makes you own gold in a virtual format and not physical gold.
The gold funds can be in the order of gold EFTs and the gold saving funds.