4 Reasons Why A Mutual Fund Is Just Like A Good Friend

A friend in need is a mutual fund indeed.

There is probably no adage about friendship quite as popular as "A friend in need is a friend indeed." Friendship is special, no doubt. It is often the case that your good friends will be closer to you than your family. Friendship goes beyond jokes and the hanging out. It is deeper than that, which is why this old adage resonates with so many of us. And this is the kind of bond we celebrate on the first Sunday of every August—Friendship Day.

Life, of course, has numerous ups and downs. People will always be around you when you're doing well, but it is only the true friends that will stand with you in times of adversity. That's what makes a good friend, and that is the kind of friend a mutual fund can also be. No, really. And here's why.

1. It's with you in good and bad times

Much like a good friend, a good mutual fund will not only ride the good times with you but also protect you during the bad. During a bull run, a good mutual fund will earn high returns, and in case of a bear phase, it will protect your investments by limiting the losses. When the markets are going down, your good mutual fund friend will try to protect your money from dwindling away.

2. You can trust it to have your back

When a friend has to take a decision for you, you need it to be made in the right manner. A good friend is one you can trust to do the right thing on your behalf. Similarly, a good mutual fund is also one you can trust to take the correct investment calls to help you make the best of your invested money.

3. It's always ready to help you financially

When you're in dire need of money, you can usually rely on a friend to help you tide over the rough phase. Your mutual fund friend will also do that. One of the benefits of investing in mutual funds is that there is no restriction in redeeming your investments (apart from the three-year lock-in period of ELSS funds). Another reason why a mutual fund is a good friend indeed.

4. It will let go without grudges

It may happen that you might want to take a break from a certain friendship, not matter how good that friend has been to you. A good friend would allow you to do that without holding any grudges. A good mutual fund friend would also let you move on from it to another fund. No questions asked.

So, this Friendship Day, while you celebrate the friendships you value and cherish, start a new friendship with a mutual fund as well. Choose this friend wisely and it will hold you in good stead for many years to come.