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MythBusting & FAQs: Mutual funds

Updated: Aug 4, 2019

Myth: I trade in mutual funds, and thus I am a stock market investor?

Trading is an activity in stock market which refers to frequent buying/selling transactions. Trading can generate profits in asset classes which have high volatility, however, given mutual funds do not exhibit volatility, trading in mutual funds doesn't generate profits in a realistic way. In short there is no concept of a "mutual fund trader", but yes you are a stock market investor if you invest in mutual funds.

Question: What is the time horizon for investments in mutual funds?

Generally mutual funds investments are for longer period of time (at least 3-5+ years). Click here to know more about mutual fund investments. However the investment horizon in a fund also depends on the risk associated with the fund: