Some people scared of taking Risk & Some People describe Risk as Opportunity. We cannot eliminate risk from our Lives rather surrounded by many Risk factors. When it comes to Investment, Risk Vs Reward Matrix in Mutual Funds are extremely aligned.
There is a Risk in Driving, Eating, Sleeping, Running, or anything we are doing in our daily Life Routine still we get feared when it comes to our Financial Planning. Everyone wants maximum returns in their Portfolio but hesitate to add any risk factor in the portfolio. Without Risk, there are no rewards so simple is that.
One thing we must know that Risk can always be Retained, Risk can always be reduced & Risk Can always be transferred but Risk can never be eliminated completely.
When it comes to Investment Products, most people think that there is no risk in FD, RD, PPF, or Any Gov Saving Product. As I said Risk is everywhere, in debt products, the highest risk is not fulfilling the dream coz there is a capping on the upper side of Returns, also they are prone to Interest Rate Risk, Default Risk & Re-Investment Risk, etc.
To get returns above the interest rate, the only option left with us is the equity market. A risk degree in the equity market is always on the higher side But there is no capping on the maximum return one can get if the right stock picked at the right time.
Mutual Funds are the best way to enter into the equity market where the initial risk is reduced by choosing a diversified portfolio and an expert fund manager. The Indian Equity market has a growing Ecomony and has a potential to generate return on very higher side. If one has patience to wait and let your money generate income for you.
Biggest Risk in the equity market is always “TIME”, wrong timing or short time investment will always lead you into too much trouble. It is highly advisable that you enter into the equity market through equity-based mutual funds and that too if your investment horizon are more than 3 years. Traders mostly losses & Investors Mostly gains, simple Formula applies in the equity market.
All the views are personally unbiased & this has nothing to deal with promotion or demotion or any financial products. Investments in Mutual funds are subject to Market risk, please read the offer documents carefully before investing.