Mutual Funds - The Safer Portion of Equity Investment

Apart from Stock Shares, Mutual Funds are another aspect of Equity Investment, where equities are in the hands of private individuals.  Mutual Funds are usually considered as the Safer Portion of Equity Investment.

Mutual Funds can be defined as a professionally managed Investment Program which is funded by shareholders and it does trade in diversified holdings. Like Stock Shares, even Mutual Funds have their own pros and cons. Now being part of Equity Investment, even Mutual Funds may not give total guarantee of all time fruitful monetary profits so even over here careful & planned investment is recommended by various market experts.

In Mutual Funds, money is taken from various investors and is invested in Stock Markets on the behalf of the investor(s). Mutual Funds hold various numbers of companies so even if one company’s value falls in the market, then also an investor does not lose all the money.  An investor has to sell or purchase Mutual Funds from the Funds House itself. Mutual Funds cannot be sold or bought from another investor like it happens in Stock Shares.

An Investor may have to pay annual expense penalties for early withdrawal of Mutual Funds which makes this option of Equity Investment a bit rigid similar to Bank Fixed Deposits in Safe Financial Investment. Various Financial Consultants and websites over the Internet provide detailed explanations regarding Mutual Funds. Now it’s totally up to the Investor to decide whether he or she wants to go for Stock Shares or Mutual Funds in Equity Investment with some part of the earned money.

Stock Shares - The Risky Portion of Equity Investment

In today’s time of Modern Financial Investment Methods, many people want to invest their money into Equity Investment also, apart from Savings Investment like Bank Fixed Deposits. Equity Investment can be defined as the buying and holding of Stock Shares by any individual or organization done in return of earning income from Dividends when the Market Value of that particular share will rise. Mutual Funds are another aspect of Equity Investment, where equities are in the hands of private individuals.  Mutual Funds are usually considered as the Safer Portion of Equity Investment.

In Developing Economies like India, there is a huge scope for Equity Investment in Stock Shares. The Four Major Metropolitan Cities of India which are New Delhi, Kolkata (Calcutta), Mumbai (Bombay) and Chennai (Madras) have got their dedicated Stock Exchange Office Buildings. There have been some Stock Share Scams in India in the past many years which has resulted the Union Government of India to set up a Stock Market Regulator for trying to prevent such scams by the name of Securities and Exchange Board of India (SEBI).

Investment in Stock Shares can be fruitful or loss worthy as this is a Financial Sector which is prone to external factors like Recession and Financial Policies of a nation’s Union Government. An organization or individual should not only take ample advice from a reputed Financial Consultant but also do some personal research of the Stock Markets, Economic Climate and the company’s Financial Condition, whose stock shares are to be bought.

 
Many Financial Experts in India and rest of the World feel that it would be wise to invest some amount of our income into Equity Investment, be it Stock Shares or Mutual Funds for better Financial Gains. Such steps can help our money from becoming stagnant and this may help us in growing our income positively.