What is Mutual Funds?-Full detail

What is mutual funds? lets discuss the meaning of mutual funds with simple example. Every month when our income is credited then we keep some part of that income in saving account. We keep some money as savings for our later use maybe for future expenses or for other uses such as to buy a new house,Car, for emergency,study

and so on.

Meaning of Market Cap

So what are the ways to save our money-? one simple way is that we keep our income

in the bank and its get collected. But it is not an effective way to save our money because such a money loses their value.

Due to increase in inflation rate the price of commodities’ also increase.But the value of our money keep decreasing every year by certain percentage according to change in the inflation rate.Because of this reason people invest their money .There are different places or sectors to invest our money.Such as FD(Fixed Deposit),Share Market,Government bonds,Real estate etc.

Every Investment has return ,risk and time .Return means how much percent of profit are you earning through investment.Return is normally seen in percentage.If our inflation rate is 10% then ,to earn profit,

our return percentage should more than 10 %.(profit %=>10%).


Otherwise there is no profit of investment.If you have put your money in investment then your profit percentage should be more than inflation rate.Risk means how-

risky it is to invest,what is the chance of losing all of our money in that investment.What is the chance of going in loss after investing there.And time means for how long are you investing.So,the basic rule is ,if the time is more ,risk is more ,there will be the chance of more return.

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