Mutual funds myth 1: It's all about timing
While there is no denying that market fluctuations do have an impact on the percentage of growth provided by the Mutual Funds, it is also pertinent to note that over an extended period of time these fluctuations get evened out. Thus anytime is a good time to start investing.
Mutual funds myth 3: Lower NAV is better
It is more often assumed that a fund with lower NAV is a better prospect for growth, as one can buy more units at the same cost. But it is equally important to pay attention to other performance aspects like track record, fund management and volatility which determine the portfolio return.
Mutual funds myth 4: You need lump sum to invest
While there are some Mutual funds that do allow you to invest a lump sum, it is always better and easier to invest through systematic investment plans (SIP), to make the most of market fluctuations. In fact, most funds today allow investments as low as Rs.1000, with no limits on the maximum amount.
Mutual funds myth 5: Mutual funds with higher NAV have peaked
Another persistent myth is that funds with higher NAV have reached a peak and hence aren't good areas for investment. The reason why a fund has greater NAV could be multi-fold, based on the time and investment portfolio. It does not reflect upon the profitability that an investor can have from that fund.
Has demonetisation nudged you towards Mutual funds?