Even before we ask what mutual funds are, we tend to ask if mutual funds are safe? Is it safe to invest in mutual funds? How risky are mutual funds? And it’s natural to be cautious and vary of any investment avenue that you are new to.
In this blog, we will answer some of the most common questions that people have about mutual fund investments and the risks involved.
Should You Be Afraid Of Mutual Funds?
What Makes Mutual Funds Safe?
So broadly speaking, things that make mutual fund investments through an app like Cube Wealth safe are:
Trustworthy Money Management Apps
Experienced Wealth Coaches
Rupee Cost Averaging (In case if SIPs)
High average returns
Fund options based on your needs
Transparent investment advisors
What are the risks and returns of investing in mutual funds?
No investment is 100% risk-free – even those that are advertised as completely risk-free will have some risk involved. Mutual funds like any market-linked investments depend on how the financial markets perform. However, since your investment is spread across multiple companies, your chances of losing money are exceptionally low. Moreover, you will likely have more than one mutual fund in your portfolio – which means the risk is further distributed across funds.
A good wealth coach can help you diversify smartly across various types of funds to reduce this risk even further. So, if you’ve invested smartly and in the right funds, you will likely reap healthy returns. The one risk that any investor faces across the board is that of a market-wide crash – this is rare and is symptom of recessions. In a recession, your mutual funds will likely lose value. However, if you stay consistent and invest through the recession you will still be able to get good returns when the economy recovers.
The average rate of return on mutual funds
Safe Mutual Funds To Invest In India
There are many good mutual funds that you can invest in if safety is your primary concern. As a risk-averse investor, you could invest in debt funds, hybrid funds or even equity funds that have historically had a great track record. To get specific fund advice please Download The Cube Wealth App or Contact A Cube Wealth Coach.
Here is a list of few of our top funds –