Before we start this course, let's take a quick recap of what we discussed in the part one of mastering mutual fund investment. In case you have not taken that course, I strongly urge that you take that course, we will be requiring the knowledge of all the terms and terminologies that we have discussed in part one. In the part one we discussed what are mutual funds, I would require that you know the meaning of mutual funds and what exactly mutual funds are to be able to take this particular course. So, again in case you have not taken part one in case you do not know what is mutual funds, please take part four of this course and then it will make sense to proceed with this. Recall that based on one classification, we can classify mutual funds as open ended mutual funds and closed ended mutual funds.
And the hybrid between open ended mutual funds and conditional mutual funds are exchange traded funds based on another classification with themes We can classify mutual funds as equity funds that debt funds and the funds which are which invested in both equities and debt, we call them the balanced funds. So, just to recap, equity funds basically invest in equity that is stocks and shares and debt funds invest in debt instruments primarily. To invest in mutual funds, we can apply through the direct plan or the regular plan. Direct plans are the plans in which the mutual funds are bought directly from the MCs while in regular plants we buy the mutual funds through an intermediary. We also know that there are two options for investing in mutual fund the growth option and the dividend option. In the growth option we do not fit all the dividends which are declared from time to time and allow the capital to increase over a period of time.
But a dividend option we keep withdrawing the dividend from the mutual fund as they are declared from time to time. In the dividend option, we have to survive dividend reinvestment option and the dividend payout option. In dividend reinvestment, the dividend amount is used to purchase more number of units in the same mutual fund. While in dividend payout, the amount is received in the bank account. We discussed a plethora of terms, we will need the knowledge of these terms. With this short recap, we should be ready to start the course.
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