Frequently asked questions

You can find answers to some commonly asked questions in this section. If you don’t feel satisfied with the answers provided in this section you may refer to our blog. Also please don’t hesitate to give us a call or write to us.

Do you have any questions?

Questions and Doubts are the basis on which we build our knowledge. Investments form a very important part of our life and our future depends on the investments we make today. Investments in Stocks, Mutual Funds, Bonds, Insurance, Real Estate can be a very tricky and complicated process to some of us. Don’t worry, we at Mungekar Wealth are always present to answer all your doubts and queries so that you can make the right decisions.

Is it safe to Invest in Mutual Funds?

There are more than thirty categories of Mutual Funds. Each category is suitable for a specific goal or risk profile. Investors have to choose the right category of mutual fund depending upon their investment horizon and risk bearing ability. Further, among each category you will have a choose from among several mutual fund schemes. If you think you can garner the knowledge required to choose the right category and the right schemes depending upon your investment horizon and risk appetite you can invest on your own. Alternatively, it is wise to consult a Mutual Fund Distributor or Registered Investment Advisor to guide you through your investments in Mutual Funds.

Is it safe to invest in Stocks?

Stocks also known as Equity Shares are an excellent tool for long term wealth creation. However there are certain guidelines and drawbacks for investing in stocks directly, as compared to investing through Mutual Funds or Portfolio Management Services. Direct investments in stocks require a much bigger investible surplus than investing through Mutual Funds. Also investors may suffer because of lack of diversification as diversification will require an enormous corpus for Equity investments. Also it is easier to track and study Mutual Funds as compared to Stocks. Mutual Funds and Portfolio Management Services offer professional management of your funds by Experts.

How should I plan for my Retirement?

It is very easy and fruitful to use Mutual Funds as an investment tool to plan for your retirement. It is best to start saving for your retirement as soon as possible. The earlier you start saving for your retirement the better because investing early in life allows your investments to grow faster through the power of compounding. You also benefit from Rupee cost averaging if you invest through Systematic Investment Plans over the period of your working life. There will be a huge difference to your retirement corpus even if you delay your monthly SIPs by five years.

Are Mutual Funds better than Fixed Deposits and Life Insurance?

Mutual Funds definitely offer better returns as compared investments in Bank Fixed Deposits and Life Insurance Products. Also if you take proper guidance from a Mutual Fund Distributor or Registered Investment Advisor you won’t have to worry about losing your money. Mutual Funds don’t suffer from long lock in periods like Life Insurance products. There are several articles explaining the advantages of Mutual Funds over Life Insurance Products and Fixed Deposits, in our Blogs page. Please go through them for a detailed study.

Will I lose my money if the Mutual Fund Company Shuts down?

A Mutual Fund Company (The Asset Management Company) is not allowed by law to shut down. If the Owners of a mutual fund company want to shut the business they will have to sell it off to another Company, but they can’t shut it down. The Mutual Fund Schemes continue to operate under a new management.

How much returns can I expect from Mutual Fund Investments?

The returns from a Mutual Fund investment depend upon the kind of mutual fund scheme you have invested in and also the period of holding and several other factors. As a rule of thumb, if your investment horizon is ten years or more you can safely invest in Equity based mutual funds (Actively managed as well as Passively managed). The returns given by good equity based mutual funds over the last ten years and more are in the range of 10% to 20% per annum Compounded Annual Growth Rate (CAGR). If your investment horizon is in the range of five years, you can opt for Passive large cap funds such as Index Funds. The returns could be in the range of 8% to 12% per annum (CAGR) or more based on empirical evidence. If your investment horizon is less than five years, We suggest you opt for debt based mutual funds. The returns are only slightly higher than Bank Fixed Deposits for these funds. Kindly note that the rate of return mentioned here is based only on past experience which may or may not get repeated. Kindly consult your Mutual Fund Distributor or a Registered Investment Advisor for specific advice.

When can I withdraw my money from Mutual Fund?

You can withdraw your money at any time. There are no restrictions as to when you can withdraw your money. However if you have invested in Tax Savings Funds (ELSS Funds) then there is a lock in period of three years from the date of investment. Also if you are withdrawing money within a year of investment then it may carry a Exit Load of 1% of the withdrawn amount.

How much Tax do I have to pay on the Equity Funds?

If you are redeeming your Equity based mutual funds after a year of investment then the profits from such sales are called Long Term Capital Gains. Long Term Capital Gains of Equity and Equity based mutual funds are taxed @ 12.5% plus surcharge and cess after allowing for a limit of 1.25 lakh rupees which is non taxable.

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Mumbai.

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munagekarsameer@gmail.com

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(+91) 9820744734.