What is investing in Mutual Fund really?
Most of us are skeptical when we heard investing in Mutual Fund. Some will tell us that it is scam, pyramiding or networking. I cannot blame them or argue with them, maybe they have no idea about investing in Mutual Fund yet.
Are you? If not, let us learn together.
WHAT IS INVESTING?
Investing as Investopedia defined is the act of committing money or capital to an endeavor (a business, project, real estate, etc.), with the expectation of obtaining an additional income or profit. Investing requires knowledge, purpose, target amount and timeline in order for our investment to grow. Invest in knowledge first by reading valuable books, blogs, video blogs or attend seminar (free or paid). Know the purpose, it may be for retirement, educational funds etc. Let us also take consideration the target Amount and timeline in order for us to succeed and hit our goal.
In choosing investment vehicle, we need to understand whether or not the investment vehicle we chose beats inflation. For example, does the interest of our money deposited in the bank savings account beats inflation? If no, is there any alternative?
Inflation is the price increase of commodities and services over time resulting to decrease in one’s purchasing power. Inflation is a major factor to consider when we are building up our financial future. For example, 100 pesos today will be 97 pesos next year.
Did you know that you can protect your money against the effects of inflation by investing in mutual funds? Investing in mutual funds protects you money against the effect of inflation. Savings accounts in banks are good as it serves emergency funds but certainly there are not enough, for they are susceptible to inflation and can make your money value less over time.
WHAT IS MUTUAL FUND? WHY CHOOSE MUTUAL FUND AS INVESTMENT VEHICLE?
Mutual Fund is money pooled from a certain number of investors or Continue reading “What is investing in Mutual Fund?”