A mutual fund is a professionally managed company that collects the money of many investors and invests it in securities such as stocks, bonds and short-term debts, equity or bond funds, and money market funds.
Mutual funds are a good investment for investors who want to diversify their portfolio. Instead of focusing everything on one company or sector, a mutual fund invests in different securities to try to minimize portfolio risk
If someone were to ask you, who should eat more protein or carbohydrates or vitamins, what would your answer be?
Everyone needs to eat all types of nutrients, but the proportion of nutrients will vary for each person depending on age and physical needs. For example, growing children need more protein and carbohydrates than adults. They also need a sufficient supply of energy-rich carbohydrates. The same principle also applies to your investment portfolio.
Every person must have a mix of stocks, debt funds, gold, real estate, and other assets in their investment portfolio. But the proportion of each asset will vary for each person. Therefore, everyone must have some exposure to fixed-income assets such as debt funds. Older people must allocate more of their portfolio to debt funds than young people in their 30s. Among young people, a conservative investor who is uncomfortable taking high risks should invest more in debt funds than his peers who might be more comfortable with the volatile nature of equity investments. As a general rule, it’s recommended that you allocate a portion of your portfolio equal to your age to fixed-income assets such as debt funds. NewMutual Fund investors can also start with debt funds