Investing in Equity Mutual Funds, How It Works For You!
Investing in the equity market requires knowledge, risk taking ability, and patience to tackle the unfriendly nature of the market. Yet, not every investor possesses all the above-mentioned characteristics, which is where equity mutual funds come into play with a sensible and simple way to invest in the share market while not having to deal with specific underlying investments.
According to Harsh Agrawal, Founder of Moneyplantfx - equity mutual funds are a fantastic way for investors wanting wealth creation for the long-term, while also getting the support of a professional and enabling you to take less risk than investing directly in the stock market as a stock trader.
Equity Mutual Fund Defined
Equity Mutual Funds are mutual funds that combine many investors' money and invest it in different companies both in respective shares. The mutual fund will go up or down if the price of these shares changes in the stock market.
In an equity mutual fund, the Net Asset Value reflects the price the investor pays for each unit of the fund. Since the NAV price fluctuates mostly in line with the stock market, this means the NAV is sensitive to volatility.
At Moneyplantfx, we educate our clients on meaningful analysis of their NAV and how their activity reflects short term market fluctuations or longer term value.
Advantages of Investing in Equity Mutual Funds
1. Gain for Capital Appreciation
Equity mutual funds can facilitate capital appreciation in your investment. The net asset value of a fund will increase when the value of equity stocks, which the fund holds, increases in value. You will appreciate the capital, and the mutual fund will reinvest the profits which permits you to capitalize on compounding value.
Harsh Agrawal said it well: "Compounding is the eighth wonder of the world, and equity mutual funds take advantage of this really well when you are investing with a longer time horizon."
2. Dividend Income
When equity mutual funds earn dividends from the stocks that it owns, that dividend income is passed out to the investors. It's a great and passive way to earn some extra income, on top of capital gains.
3. Tax Rebate
The additional benefit of investing in equity mutual funds is with tax, direct gains with equity mutual funds investing include either zero long-term capital gains (for holdings over one year) or super-low capital gains percentage rates. On top of this, dividends received are tax-free for equity mutual funds investing too!
4. Professional Management
Not everyone has the time or expertise to monitor the stock market. There are many equity mutual fund money managers who will analyze market trends, select stocks, and rebalance portfolios to maximize returns on your behalf.
At Moneyplantfx - Harsh Agrawal and his team ensure that any client accounts are allocated to best performing funds managed by top people in the industry.
5. Liquidity
Although direct investments in company stock may have some liquidity, mutual fund units (especially open-ended equity funds) are liquid. As an investor in a mutual fund, you can buy or redeem your units at any time based on your needs. In any investment class and type, this liquidity is advantageous as the capital does not have to remain locked-in until an opportune moment to take a profit from stock price appreciation.
Conclusion
If you are a balanced risk investor looking for diversification, capital appreciation, tax advantages, and professional management, then equity mutual funds would be the best option. Harsh Agrawal and Moneyplantfx will help you navigate your investments with strategic options and trusted advice.
Make a good decision—invest in equity mutual funds today with Moneyplantfx!
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