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Mutual Funds
Mutual Funds is when a company asks a small amount of money from different people. They divide a amount in different parts which is called unit .
Net Asset value is 10 rs
40000 Is Units
Mutual fund will invest 400000 in different fields. So your money indirectly goes to than company whose share price is greater .
Mutual fund is professionally managed vehicle made up money from investors in order to invest on their behalf.
Mutual fund charges fees for the same called expense ratio .
Per unit value increases because company so mutual fund value also increases .
Investors can sell their units at a higher NAV.
Invest in Systematic Investment Plan. Every month deduct your bank money in mutual fund .
SIP
5000/- every month invested
12% return in mutual fund . (assume)
after 20 years it will be approx 49 lakhs.
If you continue your portfolio will be a 1cr value .
This is known as power of compounding.
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