Every one wants good returns without taking any risk. But is it possible to earn such a return without even investing your money? If you’re investing your savings, you should be willing to take the risk for earning a return that’s better than inflation. (To know how inflation impacts your savings, read this article here) This investment could be for some of your future goals like children’s education, new home or retirement. However, you may be worried that you are risking your hard-earned money by investing in Mutual Funds, when you could have put it in a fixed deposit. And that’s a valid doubt.
Mutual funds are known to be risky. They don’t guarantee returns like fixed deposits. But they are like a game of cricket. When the Indian team gets to the pitch, we don’t even know whether they’ll win the match. There is huge risk of losing but there is an equally big opportunity of winning. Unless the team takes the risk of playing the match, they can’t taste success. Same goes with Mutual Funds. Unless you risk your capital by investing it, you can’t experience the other side of Mutual Funds i.e. the potential to earn higher inflation-adjusted return than most other options like FD, physical gold, real estate etc.