Whether one invests ₹ 500 or ₹ 5 crores, the returns are the same. Confused?

Not if you consider the returns on a percentage basis. For example, if a scheme has returns of 12% per annum, then an investment of ₹ 500 would grow to ₹ 627.20 in two years. An investment of ₹ 100,000 in the same scheme would be ₹ 1,25,440 during the same period. While the rate of appreciation is the same in both cases, only the final amounts differ because of difference in initial investments.

We need to bear two things in mind here. Returns in percentage terms is the same for any amount invested. However, a larger amount invested at the start would result in larger absolute gains.

All of this should not distract an investor from making a start. That is the most important act in investing.

How long does one need to stay invested in a Mutual Fund?

Are Mutual Funds an ideal investment for the small investor?