What is a Mutual Fund and How Does It Work? How to find Best Mutual Funds to Invest in 2019

The

fund

is fine at least  

what

ever we look for, there was no lock-in period for any scheme but that should be a basic precaution that you should check before

invest

ing in any fun and the last point is very very important   I am

invest

ing in a liquid

fund

,

does

this mean? that there is zero risk, as I mentioned, is a very important point, guys, please understand this point. Okay, so there is zero risk involved in liquid

funds

? The answer is no, there is a risk for sure. See at the time you will get a little higher return compared to saving a little more return compared to FD there is a general rule of Finance high risk high returns the moment you read higher returns means you are exposed to some type of risk now,

what

could that some type of risk that you could have?

Let's say, but ma'am, it is a debt fund, so there is no stock market risk. I agree, there is no stock market. This question is: where do you do this? What instruments do these

mutual

funds

invest in? Well, going back to our first point, people like you and I invested in this

mutual

fund now the question is where is this going? Where

does

this pool of money go? This pool of money can go into something known as a certificate of deposits. It could go into commercial paper. It could go into government bonds into Treasury bills, okay?

I'm sure these are all strange names to you, but if I start explaining each and every concept, the video will be like 1 hour or so, so I'll discuss this separately in a different video. Well, these are different names for debt. instruments from now on okay now what could happen I will give you a simple example of one of the debt instruments here one of the debt instruments I talked about is a commercial paper okay let me repeat it is a debt instrument , be it DEBT, it's not a death instrument  okay, sure, I know it was a bad joke, anyway, so the debt instrument is an unsecured instrument, what will it mean tomorrow if any company that issued this paper commercial and that is a commercial paper that this mutual fund is in? example of investment in bankruptcy of that company, yes we have an example of our favorite ILFS, okay, ILFS presented a commercial, there were many mutual funds, liquid funds were invested in commercial papers of ILFS, okay, what will happen?

Is there a risk to this liquid fund? Yes, there is a risk, so make sure that not a large part of your liquid fund goes into a specific category, like a commercial paper, and in the worst case, it could be that it goes into a commercial paper, but only from one or two companies. Okay, so make sure that the portfolio of this liquid mutual fund scheme is well diversified in different types of instruments and also in different companies that you know that issue these types of instruments. Well guys, to sum up liquid funds are not risk free but they are definitely a category of low risk mutuals. funds the question is where can I

find

the portfolio of all these typical liquid fund schemes?

We have a free website moneycontrol.com and you will

find

the portfolio of each and every liquid fund on that specific moneycontrol.com so make sure you check the portfolio and then only invest in liquid funds so I hope we have an approach very very holistic about what is a liquid fund, what are the different types of fund meanings and I hope you have gained a good confidence about when should you invest in liquid funds and now that you have understood a lot about liquid funds let us understand how to invest into liquid funds in the most simplistic way through the Easy Plan application.

Okay, let's log in to our Easy Plan app and just for your understanding. is an application through which your funds are kept in ICICI Prudential liquid mutual funds. What does it say? What's it called? I'll introduce myself quickly. Well, wow, so he says he's helping me set a savings goal first. Well, I think this is very. Importantly, your first step towards financial success is to set a goal, that's what we're doing now. Let's say I want to save for a vacation, why not? or first for an emergency fund. I feel like the emergency fund is more important, so let's set it up for that. how much do you spend approximately each month, so let's say I spent twenty thousand a month, okay, obviously for three months I will spend 60,000 for six months one like twenty thousand, but I think three months' emergency fund should be enough for me, so let's leave I give this as a goal for my savings.

Do you want to save every week or every month? I am NOT a salaried person, so I will not earn a monthly income. I can also enjoy a weekly income. Okay, so let me choose weekly, but anyway. I had a choice to do it, okay? It's giving me suggestions on how much I want to save. 5% of my income, 10% of my income or 15% and I think 10% of my income should be enough to save. Okay, say that. The emergency fund will be ready in 23 months. I liked a good part of it: number one, it helped me set a goal and number two, it even helped me tell me how long it will take me to achieve it. goal, okay, so I'm saying save a goal, good job setting a goal, got a surprise gift, okay, let me cross that out.

Wow, I have a bonus of 20 rupees for setting my first ball, so a very important aspect of the easy plan is that you can invest in multiples, let's say if I start with a multiple of just a hundred rupees, you don't need to know that I invest regularly one hundred one hundred one hundred rupees, let's say in the first month I give a target of one hundred next month. I can't invest a hundred, it's absolutely fine if I skip a specific month. I can even invest five rupees in a specific month so that is a very amazing point and I think one more point is that there is no penalty charges for skipping any installment and with this you can still achieve your goals and earn a little better than that you save and almost close to your FD returns, so if you want to invest using Easy Plan app, check the link given in the description box containing the link.

Separate links for iOS users and Android users. I hope you understood today's discussion, very good, that's all from me, Jai Hind, bye.