Alok Kumar Agarwal Alankit: Why Mutual Funds Are the Ideal Equity Investment for New Investors
According to a recent report by the Association of Mutual Funds in India, the Indian Mutual Fund Industry’s Average Assets Under Management (AAUM) reached ₹40,04,638 crores in March 2023. This highlights the growing popularity of equity investments, especially after the Covid-19 pandemic.
Mutual funds offer several benefits for investors. One of the key advantages is diversification. Diversification means spreading your investments across different assets to lower risk. When you invest in a mutual fund, your money is spread across a variety of stocks or bonds, reducing the risk compared to investing in a single stock or bond.
Alok Kumar Agarwal Alankit suggests that for new investors, starting with a Systematic Investment Plan (SIP) in a mutual fund is the best approach. He recommends beginning with an index fund, as it tends to be less volatile and safer for beginners. However, he also advises being prepared for market ups and downs when investing in equities. To make the most of your investment, he emphasizes the importance of staying invested for the long term to benefit from compounding returns.