8 Myths vs. Facts by a Mutual Fund Distributor in Chennai

1. 8 Myths vs. Facts by a Mutual Fund Distributor in Chennai Many people hesitate to invest in mutual funds because of the myths and misinformation floating around. These myths often confuse beginners and can lead to poor financial decisions. In this blog, Fairmoves, an AMFI registered Mutual Fund Distributor in Chennai, uncover the most common myths about mutual fund investments and reveals the facts you need to make smart, informed choices.

2. Myth 1: Mutual Funds Require a Large Investment Fact:You can begin your investment journey with as little as ₹1,000 per month using a Systematic Investment Plan (SIP). Contrary to popular belief, you don’t need to be wealthy to invest in mutual funds. SIPs allow you to start small and build your investments over time. The real power in the magic of compounding. Myth 2: Only Finance Experts Can Invest in Mutual Funds Fact:You don’t need to be an expert, fund managers handle the hard part. One of the biggest misconceptions is that mutual funds are too complex. But the truth is, they are managed by professionals. Your job is to choose a fund that suits your risk level and financial goals. The rest is handled by experienced fund managers. Myth 3: KYC Is Needed Every Time You Invest Fact: KYC is a one-time process. Once your KYC is completed and recorded with the Central KYC Registry, you don’t have to do it again for every new mutual fund investment. This makes investing much easier and less time-consuming. If you still are not able to complete your KYC for any reason, you can contact a mutual fund distributor in Chennai, who can assist you in this process till you make your investment. Myth 4: Young People Should Avoid Mutual Funds Fact: The younger you start, the more time your money has to grow. Starting early gives your investments more time to grow through compounding. Even small investments made consistently in your 20s can lead to a sizable corpus in your 40s or 50s. Mutual funds offer a great entry point for new and young investors. Myth 5: Popular Funds Give Better Returns Fact: A fund's popularity doesn't guarantee good performance. A fund that’s currently popular might not suit your goals or risk appetite. What truly matters is the fund's historical performance, consistency, the expertise of the fund manager, and how well it aligns with your investment needs.

3. Myth 6: High NAV Means Expensive Fund Fact: NAV (Net Asset Value) only represents the per-unit price of the fund. A higher NAV doesn’t make a fund more expensive or less profitable. It simply reflects the cost of one unit of the fund. What matters is how the fund performs over time and how it aligns with your goals. Myth 7: Mutual Funds Are Only for Long-Term Goals Fact: Mutual funds can also serve short-term goals. You don’t need to wait decades to see returns. There are different types of mutual funds suited for various timeframes. For example, liquid and ultra-short-term funds are ideal for short-term needs, while equity funds work well for long-term growth. Myth 8: Returns Are Guaranteed Fact: Returns from mutual funds are market-linked and not fixed. While mutual funds can offer attractive returns, they are not risk-free. Since they invest in market instruments like stocks or bonds, their performance depends on market conditions. Conclusion: Mutual fund investing doesn’t need to be overwhelming. Once you clear out the myths, what you’re left with is a powerful tool that can help you build and secure your financial future. The more informed you are, the better choices you can make. So the next time someone says, "Mutual funds are risky" or "They’re only for the rich," you’ll know better. Start with knowledge, invest with discipline, and watch your money grow the smart way. Address: No.5, Chitlapakkam First Main road, Near. MIT College, Nehru Nagar, Chromepet, Chennai – 600044