Investing in mutual funds can be simply described as - the easiest way to become a ‘prince’ or a ‘pauper’. The mutual fund market is very volatile. People invest every day, some on a large-scale and others on a small-scale. It depends on how much return you expect and how much money you are willing to risk get that return. However, mutual funds are very popular among many as they can yield a higher rate of return than the interest rates provided by banks. Of course, how high also depends on the kind of mutual funds you invest in. For example, the top mutual funds in India like SBI, HDFC, etc. are known as large cap funds, and belong to the category known as ‘equity.’ These are capable of generating 20 to 30% interest on an investment. But of course there is a catch, equity investments are the most volatile and risky category of investments. Choosing to invest in them depends on your risk appetite.
The Indian market has progressed over the last 10 years, in terms of growth and size. At first people were reluctant to invest, as they were more used to depositing money in banks. But as inflation went up, people opened up to the idea of investing their money in it and other areas of interest. That, and the IT boom of the early 2000’s, opened up a whole new world to the growing populous of India.
What happened was people started using the internet. They learn about it, the potential of an investment and how they can benefit from it. They then started going on online to do research on the different investment options. They started buying shares and stocks of other companies, they started investing in the mutual funds of the biggest and most profitable companies. It was all available on the internet. Needless to say, mutual funds online became their major source of knowledge, and guide, for investments. In fact, the credit for the current market size and market growth of other investment opportunities can even be attributed to the internet.
Finally, the future is as, or perhaps more, unpredictable and volatile than the market for investments. With the year on increase in inflation and population, the thought of investing in it may very well supersede the thought of saving money in the bank. After all that is said and done, investing in it is a very lucrative investment opportunity - in spite of the risks involved.