Why mutual fund is market risk?

Those few points we may know or may not, but we should know.

Why mutual fund is market risk?

Like all securities, mutual funds are subject to market, or systematic, risk. This is because there is no way to predict what will happen in the future or whether a given asset will increase or decrease in value. Because the market cannot be accurately predicted or completely controlled, no investment is risk-free.

What are the 4 types of financial risk?

One approach for this is provided by separating financial risk into four broad categories: market risk, credit risk, liquidity risk, and operational risk.

Are mutual funds regulated by RBI?

Along with SEBI, mutual funds are regulated by RBI, Companies Act, Stock exchange, Indian Trust Act and Ministry of Finance. RBI acts as a regulator of Sponsors of bank-sponsored mutual funds, especially in the case of funds offering guaranteed returns.

What is the role of RBI in mutual funds?

The Reserve Bank of India regulates three categories of financial markets; money markets, government securities markets and foreign exchange markets. Mutual Funds have a presence in the first two and the Reserve Bank is therefore interested in the role that they play in developing them.

How long must you hold a mutual fund before selling?

According to   AMFI law, investors have the right to sell the shares of their mutual fund back to the fund itself at any time. Once the share has been redeemed, it is typically incumbent upon the fund to reimburse the former shareholder within one day to three days,

Is SIP subject to market risk?

Mutual funds SIP return is subject to market risk as it is an indirect equity exposure. That's why tax and investment experts advise investors to look at various angles while a choosing mutual funds SIP plan for investment.

8 ways to mitigate market risks and make the best of your investments.

Diversify to handle concentration risk .

Tweak your portfolio to mitigate interest rate risk .

Hedge your portfolio against currency risk .

Go long-term for getting through volatility times .

Stick to low impact-cost names to beat liquidity risk .

Fight horizon risk arising out of assets-liability mismatch .

Triumph over reinvestment risk .

In addition, there is also geopolitical risk, which normally gets factored in volatility risk of a stock or the market.Please remember, risks can be many, but a phased, well-informed, and disciplined approach can help you mitigate them to a considerable extent. 

Raja Bhattacharjee

 Email:  investment.junctions@gmail.com

 Phone: 09830146206 / Office : 09681518774   /  7449858289