Alok Kumar Agarwal on Mutual Funds: The Optimal Equity Investment for Novice Investors

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 recently, especially after Covid-19.

There are many advantages to investing in Mutual Funds. Firstly, they offer diversification. Diversification means spreading your investments across different assets to reduce risk. When you invest in a Mutual Fund, you are investing in a portfolio of stocks or bonds, spreading your investment across multiple companies. This reduces the risk compared to investing in individual stocks or bonds.

“Investing in a Mutual Fund through a SIP (Systematic Investment Plan) is the best method for new investors,” says Alok Kumar Agarwal Alankit. “They can start with an index fund for safety, as it is less volatile. However, one must be prepared for market fluctuations when investing in equities. That’s why I recommend long-term investments to benefit from compounding.”

Mutual Funds are relatively easy to invest in. Most can be bought through a brokerage account or directly from the Mutual Fund company. Today, many apps make the process of investing simple, making Mutual Funds an accessible option for those new to investing.