This expert is responsible for buying and selling securities, conducting analysis, and monitoring investments regularly.
Diversification of investments
Mutual funds facilitate diversification of investments, which is crucial for managing risk. Relying solely on a single security exposes investors to significant risk, especially in the event of a market downturn.
Time consuming to pick stocks individually
For instance, if an investor were to diversify by investing in individual stocks, they would need to carefully select at least 10 stocks from various sectors, which can be time-consuming.
Investing in a mutual fund
Investing in a mutual fund that tracks a broad market index like the NSE Nifty provides access to a diversified portfolio comprising as many as 50 stocks across different sectors.