A mutual fund is a professionally managed company that collects money from many investors and invests it in securities such as stocks, bonds and short-term debt, equity or bond funds and money market funds.
Mutual funds are a good investment for investors looking to diversify their portfolio. Instead of betting everything on one company or sector, a mutual fund invests in different stocks to try to minimize portfolio risk.
The term is typically used in the US, Canada and India, while similar structures around the world include the SICAV in Europe and the open-ended investment firm in the UK.
Why do I have to plan for retirement if I’ve saved enough?
Whatever your current age and financial position, you never know what’s in store for tomorrow. If you’re not sure about tomorrow, can you be sure that what you’ve saved for retirement will make you through to your last day?
Both life expectancy and medical costs are rising, and you don’t know if your retirement phase will last one or three decades. For any financial planning to work effectively, knowing the time horizon is crucial but, in this case, there is no certainty of the time frame. So, it’s best to build a surplus in your retirement corpus. But how do you build a surplus when achieving financial goals in the first place is a challenge? You can build a cushion for your retirement life by investing your savings in something that has the potential to beat long-term inflation and create wealth, such as mutual funds.
A surplus pension fund saves you from unexpected jerks, whether in the form of a medical emergency or any unpleasant event. In addition, you can afford to spend a little like giving your children or grandchildren from time to time to express your love, traveling to meet family and friends more frequently, pampering yourself with indulgences. It’s never enough to save for retirement if you want to have a romance!
