# You must know how the NAV is calculated

For a common man, his saving is much important. He loves to invest his hard earned money in an option from which he can get a good return, but the return and risk have a correlation, and hence in the options where the risk is high, the return is also high, and where the risk is low, the return is also low. Adding to the same, there is also a question of liquidity, which means one must have the amount with good return as and when he requires. In many of the avenues, the return is good, but there is no liquidity, and hence, one feels that the invested amount is blocked.

The best option:

For an average investor, the mutual fund is the best option that can help one get a considerable return and comparatively low risk, and the liquidity of the amount is also maintained as in the majority of the funds, the investor can easily withdraw the amount in a couple of days from the day of request. The mode of investment and amount to be invested are also easy, and hence, one can feel it as a convenient mode for the medium to long term investment. Many of the investors do not understand that the investment in a mutual fund is for a medium-term that is minimum one to three years. One needs to give it a time to grow the fund. One can start a SIP with as low as 500 per month. One can also go for a lump sum investment in any of the options also.

The investment:

The moment one invests in the mutual fund, he is allotted with a portfolio number. He is given a statement of investment where all the details of the investment are mentioned. One can find the name of the fund where the money is investment, the option and even NAV at what rate the units are offered to him.  To calculate the NAV, there is a NAV formula, which is used by the company to have an equal distribution of profit to all the investors.

The simple formula here is net profit divided by the available unit in which the profit needs to be shared and whatever the amount comes is the net asset value. Here the profit means profit after all the taxes and expenses. Hence the formula is simple, and one can get the NAV of the unit daily from the site of the company or call centre. There are also many other websites from where this value can be easily available.

The mutual fund system is transparent, and hence, it is the best medium to invest in. One can easily know what the amount he had invested at what NAV and what is the NAV now so that he can judge if he has got any profit or not. The investment can be done in different options that are offered by different companies. One can go for a dividend option or growth option as per his requirement.