Index Fund Corner
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| Scheme Name | 1-Year Return | Invest Now | Fund Category | Expense Ratio |
|---|---|---|---|---|
| Axis Nifty 50 Index Fund | +32.80% | Invest Now | Equity: Large Cap | 0.12% |
| Axis Nifty 100 Index Fund | +38.59% | Invest Now | Equity: Large Cap | 0.21% |
| Axis Nifty Next 50 Index Fund | +71.83% | Invest Now | Equity: Large Cap | 0.25% |
| Axis Nifty 500 Index Fund | — | Invest Now | Equity: Flexi Cap | 0.10% |
| Axis Nifty Midcap 50 Index Fund | +46.03% | Invest Now | Equity: Mid Cap | 0.28% |
One of the most important decisions investors face is determining how long to hold investments. In this situation, there are two main strategies — short-term and long-term.
Short-term investment
Short-term investments are often held for less than three years and are preferred over long-term investments due to their liquidity and lower risk level. It offers a variety of options like cash equivalents, bonds, and fixed-income securities. These investments often serve to safeguard funds and provide moderate growth for investors.
Advantages
It allows easy access to your funds when needed as they mature quickly or have shorter lock-in periods.
This method allows investors to make quick adjustments to their investment decisions in response to changing market conditions or personal financial demands.
It focuses on immediate price changes, so there is a chance for fast profit.
Disadvantages
When compared to long-term investments, short-term investments may not provide the same amount of considerable wealth accumulation.
Unlike long-term investments, these investments may require regular research and monitoring.
Long-term investments
Long-term investments are held for many years. It has the potential for higher returns at the cost of higher risk and lower liquidity. Some of the popular long-term investment options include equity shares, real estate, and long-term bonds. This option is usually for those investors looking to accumulate significant wealth for future purposes, such as retirement or children’s education.
Advantages
If you are a budding investor, long-term methods can be simple, where you can choose assets that are likely to grow over time. There is less emphasis on daily market volatility and more on overall progress.
Compounding, which is the process by which your earnings generate further earnings, is another key benefit. Compounding can grow a small investment into a large one over time.
It has the opportunity to recover from short-term market fluctuations.
Disadvantages
These investments require patience and are not suitable for meeting short-term needs.
These investments are subject to market volatility, and premature exits may result in significant losses.
Conclusion
Choosing the correct balance between short-term and long-term investment options depends on your financial objectives, risk tolerance, and investment horizon. Diversifying your investing portfolio with both short-term and long-term assets will help you manage risk and achieve financial stability. Regularly reviewing your financial goals and modifying your investment mix will help you stay on track to meet your financial objectives.
