Myth 5: SIP and STP is same.
Facts : Though they sound same and have similar benefits but the working may be a bit different. In SIP you invest a fix amount at regular intervals. When the market are higher, lesser units are purchased and once they are low, the amount of units purchased is higher. Over an extended investment window, the value averages offering a lower overall price . STP simply means a hard and fast amount on a predetermined period as per the mandate submitted by the investor is transferred from one scheme to a different
Myth 6 : Dividend pay-out/Growth is all an equivalent
Fact : No. during a dividend pay-out option the dividend declared by the scheme is paid bent the investor. within the growth option, it's retained within the scheme and is reflected within the Net Asset Value (NAV) of the scheme. The dividend pay-out option offers regular income (based on the supply of distributable surplus), while the expansion option gives you a compounded benefit through a better NAV.
Myth 7 : Investment in open-end fund carries a better risk than the stock exchange
Fact : A open-end fund invests during a big selection of equity and/or debt instruments as defined in its investment objective. The fund manager selects stocks meticulously to attenuate the danger and maximise diversity. This makes investment in open-end fund less risky than direct investments in stocks. However, investors are requested to consult their financial advisors before investing.
Myth 8 : Mutual Funds need large investment
Fact: Mutual funds don't need large amounts to start out with, you'll start with whilst low as Rs. 500 per month, through a tool called Systematic Investment Plan (SIP) during a open-end fund wherein you're allowed to take a position a daily monthly instalment within the fund, basis which units would be purchased in your folio. In fact, the sooner you begin investing, the higher it might be for your money because it would get to undergo compounding for a extended period.
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