So if you attach a goal mutual fund is right. If you don’t attach, it may not be right. Next question is Why we should invest in a mutual fund when we have safer investments: One of the safer investments if Fixed deposit. Let say your income is 6lakh, you invest 1lakhs in FD. You get 8% interest => 8000. But your tax on that is 20%, 1600 = 6400 =>6.4%. if Inflation is say 5%=>1.6% is the real return.

So to beat inflation we have two choices

• Direct stocks
• Mutual funds.

Why stocks are not for everyone. Most of the investors in stocks think that returns from stocks are derived from buying. No, it’s by selling stocks at right time. And people say buy and hold. Buying a stock in IPO at 10Rs or 100rs and leave it for longtime. It’s not a guaranteed strategy. Many companies in Nifty50, 20yrs before are not even in the list now. Same way many companies who were not even listed 20yrs before is in top 50 list. A smart investor will exit a stock before it collapses. But many investors who don’t have time to track it lose big money. Why companies fail, various factors, government policies, culture, technology, taste of people. So if you invest in a mutual fund. There is an expert in the industry who will take care of your funds. Who is the fund manager and he has approximately 10analysts & agencies who will give him correct data on the company’s sales performance, potential. Based on this data they will decide whether buy or sell a stock. Their job is identify when to buy and when to sell. When your money is managed by an expert, you can be relaxed. Our job is to choose the funds for our duration based our financial goals.