Who needs demat? All mutual fund myths cracked wide open

Mutual fund myths: Are you planning to invest in mutual funds? You can now sidestep the headache of dealing with a demat account. Nowadays, purchasing mutual funds has become incredibly convenient thanks to online distributors. 

To get started, all you need is to complete the KYC process by submitting your address proof and PAN card details, along with having a bank account. Unlike in the past when having a demat account was a must for buying mutual funds through the exchange, now investors can easily buy them using net banking, which is the preferred method for many. 

Here are other myths you should be aware of before starting your investment journey:

Myth: Mutual funds are reserved for financial wizards

Dispel the notion that mutual funds are exclusively for the elite. In reality, these investment tools are tailor-made for everyday individuals seeking professional management without the need for market expertise. With seasoned fund managers at the helm, mutual funds provide a gateway to diversified portfolios and optimised returns.

Myth: Mutual fund investments are exclusively long-term

Forget the misconception that mutual fund investments are solely for the long haul. From short-term liquidity needs to ambitious long-term objectives, there's a mutual fund strategy for every investor horizon. Whether you're eyeing rapid gains or steady growth, mutual funds offer a diverse array of options to match your financial aspirations.

Myth: Mutual funds and the stock market are one and the same

Contrary to popular belief, mutual funds transcend the realm of equities. While they may invest in stocks, mutual funds also delve into bonds and other securities, providing a diversified approach to wealth accumulation. This broader scope opens doors to investment opportunities previously out of reach for individual investors.

Myth: Net Asset Value (NAV) alone determines success

Don't be swayed by a mutual fund's NAV alone. While it reflects the fund's market value, it's not indicative of its performance potential. Instead, focus on the fund's track record and the underlying assets driving its growth trajectory.

Myth: Mutual funds require a king's ransom to enter

Banish the misconception that mutual fund investments demand hefty initial sums. With entry points as low as Rs 5000 for lump-sum investments and Rs 500 for monthly SIPs, mutual funds welcome investors of all financial standings. Accessibility is the name of the game, making wealth accumulation attainable for the masses.

Myth: High NAV spells the end of opportunity

Dispel the notion that a high NAV signifies the pinnacle of a fund's success. Instead, view it as a testament to past achievements, with ample room for future growth. A high NAV is a reflection of a fund's performance, not a barrier to entry.

Myth: Mutual fund ratings guarantee superior returns

While a top-rated mutual fund may seem like a sure bet, remember that ratings are dynamic and subject to change. Past performance is just one piece of the puzzle, requiring ongoing evaluation and monitoring to ensure continued success.