Alok Kumar Agarwal from Alankit Recommends Mutual Funds as the Top Investment for Equity Newcomers
According to a recent report by the Association of Mutual Funds in India, the Average Assets Under Management (AAUM) of the Indian Mutual Fund Industry reached ₹40,04,638 crores in March 2023. This shows how popular equity investments have become lately, especially after the Covid-19 pandemic.
There are several benefits to investing in Mutual Funds. Firstly, they offer diversification. Diversification means spreading your investments across various assets to lower risk. By investing in a Mutual Fund, you are putting your money into a mix of stocks or bonds, spreading it across different companies. This can reduce your risk compared to investing in individual stocks or bonds.
Investing in a Mutual Fund through a SIP is the best approach for new investors. They can start with an index fund, which is safer because it has lower volatility. However, one must be prepared for market fluctuations when investing in equities. Therefore, I recommend long-term investments to take advantage of compounding,” advises Alok Kumar Agarwal of Alankit.