Why You Should Buy Mutual Funds

1. Built-in diversification

When you buy a mutual fund, your money is combined with the money from other investors, and allows you to buy part of a pool of investments. A mutual fund holds a variety of investments which can make it easier for investors to diversify than through ownership of individual stocks or bonds.

Not all investments perform well at the same time. Holding a variety of investments may help offset the impact of poor performers, while taking advantage of the earning potential of the rest. This is known as diversification.

Before you decide on a mutual fund, figure out how it fits with the rest of the investments you own and your overall financial goals.

2. Professional management

You may not have the skills and knowledge to manage your own investments or want to spend the time. Mutual funds allow you to pool your money with other investors and leave the specific investment decisions to a portfolio manager. Portfolio managers decide where to invest the money in the fund, and when to buy and sell investments.

3. Easy to buy and sell

Mutual funds are widely available through Individual financial adviser, banks, financial planning firms, investment firms. You can sell your fund units at almost any time if you need to get access to your money. But you may get back less than you invested as per net asset value of fund.

4. A wide range of funds to choose from

Mutual funds can be used to meet a variety of financial goals. For example:

• A young investor with a stable income and many years to invest may feel comfortable taking more risk to achieve greater potential return. They may invest in an equity fund.
• A mid-career investor trying to balance risk and return more moderately could invest in a balanced mutual fund that buy a mix of stocks and bonds.
• An investor approaching retirement might be less comfortable with risk and more interested in fixed income investments. They may invest in a bond fund.

Reasons mutual funds may not be right for you

1. Fees – You must pay sales charges, fees and expenses regardless of how the fund performs, even if the fund has negative returns. 
2. Transparency – The fund’s holdings are only known to investors at certain points in time. And you don’t have any influence or control over specific investment decisions made by the portfolio manager.
3. Pricing – With an individual stock, you can get real-time (or close to real-time) pricing information by checking financial websites or by calling your advisor or broker, and you can monitor changes in those prices as they move during the day. With a mutual fund, the price to buy or redeem your shares usually depends on the fund's net asset value (NAV), which is generally calculated only once every business day, typically after the major exchanges close.

Ritesh.Sheth CWM^®

CHARTERED WEALTH MANAGER

              HELPING YOU INVEST BETTER...  

Allaudin Bldg Shop No 1,Manchubhai Road,Malad East,Mumbai - 400097.Shop No.9,Param Ratan Bldg,Jakaria Road,Malad West,Mumbai - 400064.Tel:28891775/28816101/28828756/28823279. CELL:9930444099  www.tejasconsultancy.co.in | E-mail Us: ritesh@tejasconsultancy.co.inGo Green...Save a tree. Don't print this e-mail unless it's really necessary

Disclaimer:This blog is addressed to and intended for the investors of Ritesh Sheth & Tejas Consultancy only. You are advised to contact Ritesh Sheth & Tejas Consultancy to clarify any issue that you may have with regards to any information contained in this emailer. The views are personal. Ritesh Sheth & Family or Tejas Consultancy does not guarantee the accuracy, adequacy or completeness of any information in this blog and is not responsible for any errors or omissions or for results obtained from the use of such information. Investopedia definitions are used for educational purpose. Ritesh Sheth & Family or Tejas Consultancy does not have any liability to any person on account of the use of information provided herein and the said information is provided on a best effort basis only for educating investor. In case of investments in any of our schemes, please read the offer documents carefully before investing. 

How I Talk to My Kids About Money.

Kids can understand more than we think they can about money. A lot more. I know it, because I have one sons, ages 14, who aren’t content to just have savings accounts at the bank. He also have his own Postal Recurring Account. And, yes – he is contributing to those accounts. Aggressively.

Here’s how it happened. I grew up in a home where we discuss finances very often. We have money to invest, and it's a topic my parents understood particularly well as we all are in to financial business. When my wife and I had children, we agreed we would take a different route. We would treat our son like adults when it came to finances, to whatever degree he could understand the concepts involved.

Involving children in financial discussions from an early age helps teach them to true value of money.

A Weekly Allowance

We started, naturally, with an allowance, which we based upon his age. So when he were six years old, he could get Rs.60.00 a week, when he were eight years old, he could get Rs.80.00 a week, etc. Notice that I said “could get.” It wasn’t guaranteed. he had responsibilities to perform for that allowance, and failure would result in deductions. Plus, he had to ask for his allowance on Sundays – getting it wasn’t automatic. From this, we wanted to teach him that money had to be earned, and that nothing is a “given” in life: you have to ask for what you want and need.

A Family Discussion

About the time he were six , we began to involve him in Basic accounting with my father. on Every Sunday, and at that time my father discuss our finances in depth. We included him in that dialogue so that he understood in very general terms what my family had invested, where we invested it, and what our decisions were based on.

At first, of course, we kept things very high level for him. But as the years progressed, he started to stay longer during those meetings, asked more questions, and understood more.

A Circle of Trust

When we tell people that our son – as young as they are – have a full and complete understanding of the financial status of the family, they are often shocked. But here’s the key: we have established what we call a “circle of trust” in our family. We made an agreement with him that anything relating to our financial status can never be discussed with anybody outside the family. Otherwise, the trust will be broken and he will never be involved in these conversations again. he understand that, and he respect it.

A Personal Decision

It did not come as a surprise when our sons started to get more involved with own money. He already had savings accounts which we had set up, but upon his request, we set up Postal Recurring account for him as well. Being boy, they are highly competitive … so they are in a never-ending sibling race to see who can save and invest the most money!

An Understanding of Value

Building on the foundation of understanding they had formed by being exposed to financial matters both as a family and as individuals, my sons started asking questions about the real value of money. Not “What does the latest tech toy cost?” but the much larger question: “Why is money valuable?”

Here is our answer: money is valuable because it gives you freedom and flexibility.

That’s it. It doesn’t buy happiness, and it’s not about baubles and gadgets. The real issue isn’t whether you make a salary of four digits, six digits, or eight digits: that doesn’t bring happiness, either. The real value of money is that it gives you the freedom to make your own choices and not to have to do things you don’t want to do, and it gives you the flexibility to do the fun things that you do want to do. So the value of earning and saving is to gain freedom and flexibility.

At 12 and 14, we are now having family dialogues about how to understand risk-return trade-offs, how to balance a portfolio, how to set objectives, how to approach financing their college education, and more. Our end goal is to make sure that once our sons is on his own, he will know the right way to invest so that he is not haphazard, lazy, or foolish in their decisions. With a firm financial foundation, we know our sons will be able to experience freedom and flexibility in life – that is, he can enjoy the real value of money.





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Regards,

Ritesh.Sheth CWM^®

CHARTERED WEALTH MANAGER

              Helping you invest better...  

Allaudin Bldg Shop No 1,Manchubhai Road,Malad East,Mumbai - 400097.
Shop No.9,Param Ratan Bldg,Jakaria Road,Malad West,Mumbai - 400064.
Tel:28891775/28816101/28828756/28823279. CELL:9930444099  www.tejasconsultancy.co.in | E-mail Us: ritesh@tejasconsultancy.co.in

Go Green...Save a tree. Don't print this e-mail unless it's really necessary

Disclaimer:
This emailer is addressed to and intended for the investors of Ritesh Sheth & Tejas Consultancy only and is not spam. You are advised to contact Ritesh Sheth & Tejas Consultancy to clarify any issue that you may have with regards to any information contained in this emailer.The views are personal. Ritesh Sheth & Family or Tejas Consultancy does not guarantee the accuracy, adequacy or completeness of any information in this emailer and is not responsible for any errors or omissions or for results obtained from the use of such information. Ritesh Sheth & Family or Tejas Consultancy does not have any liability to any person on account of the use of information provided herein and the said information is provided on a best effort basis. In case of investments in any of our schemes, please read the offer documents carefully before investing.
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