Now, I choose this as the title just to piss the financial gurus off. For some weird reasons, my YT algorithm is showing me videos that is basically telling me to get out of the Mutual Funds and start direct investment in equity. While I love the idea of cutting off the middleman here (the middleman being the Asset Management Companies AMCs), I still am a rookie when it comes to stock analysis.

Now, everyone knows what Mutual Funds are, You might have heard in fact seen the ads. So basically Mutual Funds are subjected to market risk. Haha, just kidding. The Ads don't do justice to what an awesome tool Mutual Funds are for the people who are too busy to do the research and invest in direct equity and for those who want to play safe and are happy with the returns that the Mutual Funds offer.
Now, I am going to skip the book definition and will try to simplify Mutual Funds. Mutual Fund is the service offered by the AMC & Financial Institution where the funds from the clients are invested in various tools, like stocks, Bonds, and EFTs. Of course, In exchange for a fee.

Now there are thousands of mutual funds active on the market with various focuses. So the question remains how to choose a mutual fund? Well, the answer depends on you. And your financial goals and the reasoning behind them. Mutual Funds can be sectoral where they are putting money in one sector like green energy, thermal power, EV etc. Also, there is categorization based on the Market Cap of the companies, Like Large, Medium and Small Caps. Same way, there are dividend-yielding funds, hybrid funds and a bunch of others. The risk factor also varies from MF to MF, and so do the returns.
While the Nifty50 Index MF is estimated to give a return of 10-12%, the smaller and mid-cap can provide 15%-20% and in some cases even higher. This is decent because earning 20% on the market returns from direct stocks takes skill (We will be talking about the upcoming posts) I think it's a good deal.
Based on your risk appetite, goals and available capital you can select a Mutual Fund and start with investments. Another lovely option these Mutual Funds have is SIP. (Systematic Investment Plans) also in case you are planning on putting in funds every months. I am learning all this and its interesting lets dig deep in upcoming post and have fun which trying to score a good returns.

Hi Folks,

And this is Financial Tuesday. I started writing about finance as its Tuesday thing but I am loving what I am learning and turning my learning into a post is another joy. One more thing I am not an expert on the finances, I am just a learner and this post is for educational purpose and not any recommendation. Having said that, those finflencers are dumber than I thought. Moving on, I would like to thank IndiaUnited and BeAwesome community for their love and support.

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