Advantages And Disadvantages Of Mutual Funds

Is an investor really’ investing’ or merely ‘buying dreams’ when considering Mutual Funds, Market

Linked Plans & SIP Gold Investments for ‘high returns’ ?

Is Physical Gold a better investment option? Let us take a quick look at the drawbacks of Mutual Fund

investments and come to a conclusion.

Mutual funds fall into three categories, those of Diversified, Index and Thematic funds. It is important

that investor’s understand the disadvantages of all the three categories of Mutual Fund Investments

and if they stand to advantage by investing in them.

All the three categories are considered high risk because returns in all of them run dangers of being

poor or moderate over long periods of time . They all run based on

The alluring publicity campaigns introduce them as long term wealth creation solutions to buyers of

gold looking for portfolio diversification from other asset classes like equity, debt, real estate etc.

Banks define these mutual fund gold units as a way to hold small quantities of gold in a gold saving fund

as against physical gold holdings.

Under key benefits the Bank Gold SIP Investment plans highlight easy liquidation, less costs of storage

and insurance in comparison to physical gold, investments as low as Rs 1000 and transparency through

monthly portfolio holding fact sheets.

Another interesting point in these gold unit schemes which needs to be drawn attention to is that

applying for them could cost an investor a minimal sum of rupees five thousand & some of them can

only be invested in, if the investor is willing to introduce a direct debit account to the SIP offering bank;

which then gives the bank full authority to debit quarterly or monthly payments from the investor’s

account. Thereby, taking away the choice of withholding installment payments in difficult times

International financial strategists and economists while promoting precious metal portfolio

diversification are heeding investors to put their money into schemes that offer physical gold at the end

of monetary transactions; reinforcing time and again “ What you own is what you hold. “

Financial strategists are forewarning about growing international governmental debts, increasing

inflation & fiat currencies the world over; investors are being advised to give preference to schemes

which offer physical gold as the end product as these are safe haven investments..

Seasoned economists are cautioning against paper gold schemes fearing that there might be no gold

behind the paper handed over to the investor, keeping the present world economic scenario in mind.

Lastly, companies that offer these investment plans are not bound to pay the amount promised in the

form of gold at the end of the lane, in case of failure; an investment risk that accompanies all paper gold

schemes.

As proven since civilizations came into being, physical gold has always corroborated to be true money

for all times; all the rest- mere