It's a thumb rule in the investment world that risk and return go hand in hand. Higher the risk, higher is the possibility of earning greater returns but there is also a possibility of losing the entire investment. Investors with high risk appetite generally invest in the stock markets and make a lot of money in a bullish market. Nevertheless, there are a lot of instances where the investors have lost even their capital invested, forget about returns.
As investing in the stock markets is risky, some of the investors seek help from professionals to manage their mutual funds. But here too, investors often see the Net Asset Value (NAV) going below their initial NAV when they invested in the mutual fund, spelling a reduction in the amount initially contributed. To avoid these risks, many of the investors usually stay away from the stock markets and invest only in assured schemes like NSC, Post Office Monthly Incomes, etc., even though they yield low returns.
In order to give an alternative investment avenue to these risk-averse investors, Sebi has recently given its approval to mutual fund houses to launch Capital Protection-oriented Schemes (CPS). With the launch of these schemes, more and more investors are expected to invest in mutual funds. |
