Return on Investment:
An investor who is willing to take on a high level of risk in exchange for a high return can consider investing in equity. If investors have a large sum of money sitting in their savings account, they can invest it all at once in mutual funds. SIPs are a good option for people who want to invest a certain amount at regular periods. To experience substantial returns on both of them, the investor must stay invested for at least 3-5 years.
Section 80C of the Income Tax Act:
Section 80C of the Income Tax Act of 1961 permits taxpayers to deduct up to Rs 1.5 lakh from their taxable income each year. Fund houses provide tax-saving choices under the ELSS program, which has a three-year lock-in term, the shortest of any Section 80C investing options.
Long-term or short-term horizon:
Before participating in a fund, any investor should consider their risk profile and financial goals as well as the investment horizon. Depending on the risk-reward potential, the investment horizons could be long-term or short-term. Because the risk is larger, long-term investments yield better returns than short-term investments. Short-term investments, on the other hand, have a low-risk, low-return attitude. Short-term investments can be made in liquid or ultra-short-term funds. Long-term investments can be made in a lump sum or through a systematic investment plan (SIP). To summarise, there are numerous reasons why mutual funds are a great investment choice. Regardless of the period of investment, one can invest with the correct advice, decision, and direction on fund selection, performance, and returns.
Also Read: What Are The Factors That Determine The Best Time To Invest In Mutual Funds? Part 1
