All of you must have heard of Mutual funds and many of you must have invested in these also to save income tax. But how many of you know what are mutual funds?
Mutual fund is a fund managed by an investment company with the financial objective of generating high rate of returns. These investment management companies collects money from the investors and invests those money in different stocks, bonds and other financial securities in a diversified manner.
Before investing they carry out thorough research and detailed analysis on the market conditions and market trends of stock and bond prices.
People invest in mutual funds rather than investing individually because of lack of knowledge about stocks, bonds, etc. Through mutual funds they get expert’s suggestions for their investment and they can also reduce their risk.
In next post I would be discussing about various forms of securities.
Suggestions and comments are welcome