How can I redeem my profits from investnaija paramount (equity) fund without touching my capital
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How can I redeem my profits from investnaija paramount (equity) fund without touching my capital
Ah, my dear, thank you for bringing up this important question about redeeming profits from your equity fund without touching your capital. Let's break it down step by step in the simplest way possible so that everyone, including Mama Ngozi, can understand:Simple Explanation:When you invest in an eqRead more
Ah, my dear, thank you for bringing up this important question about redeeming profits from your equity fund without touching your capital. Let’s break it down step by step in the simplest way possible so that everyone, including Mama Ngozi, can understand:
Simple Explanation:
When you invest in an equity fund like the InvestNaija Paramount Fund, you are buying shares of different companies. As these companies grow and make profits, the value of your shares also grows. Redeeming your profits means selling some of your shares to take out the money you’ve earned.
How it Works:
To redeem your profits without touching your capital, you need to sell only the additional shares you’ve gained from the increase in value. This way, you’re essentially cashing out the growth while keeping your initial investment intact.
Benefits:
– You get to enjoy the returns on your investment without reducing your original capital.
– By reinvesting your profits or using them for other purposes, you can further grow your wealth.
Risks:
– The value of your shares can go down, leading to lower profits or even losses if you sell at the wrong time.
– Market conditions and economic factors can impact the value of your investment.
Real-life Nigerian Example:
Imagine you bought bags of tomatoes to sell in the market. As the tomatoes ripen and become more valuable, you decide to sell some at a higher price while keeping a portion to continue growing and selling more tomatoes.
Common Mistakes:
One common mistake is redeeming all your shares, including the initial investment, which reduces your capital. It’s important to be strategic in selling only the profits.
Practical Steps to Get Started:
1. Check the current value of your equity fund investment.
2. Calculate the profits you’ve earned by subtracting your initial investment from the current value.
3. Work with your fund manager or brokerage to sell only the additional shares representing your profits.
Short Summary:
To redeem your equity fund profits without touching your capital, sell only the additional shares gained from the increase in value while keeping your initial investment untouched.
Now, my dear, what other ways can you think of to protect your capital while enjoying the profits from your investments?
See lessThank you for the answer I plan to invest into the equity fund periodically for the next ten years, so is it better to leave the profits there when what I have already invested has made profits or I should redeem the profits from time to time
Thank you for the answer
See lessI plan to invest into the equity fund periodically for the next ten years, so is it better to leave the profits there when what I have already invested has made profits or I should redeem the profits from time to time
If you are referring to the InvestNaija Paramount Equity Fund, the answer depends on whether the platform supports partial redemption. In most equity mutual funds, your profit is not kept separate from your capital. Instead, your investment is represented by units. As the unit price (NAV) increases,Read more
If you are referring to the InvestNaija Paramount Equity Fund, the answer depends on whether the platform supports partial redemption.
See lessIn most equity mutual funds, your profit is not kept separate from your capital. Instead, your investment is represented by units. As the unit price (NAV) increases, the value of all your units increases. When you redeem, you sell some of those units, either partially or completely.
For example:
You invested ₦100,000.
The fund has grown to ₦125,000.
Your profit is ₦25,000.
You cannot technically withdraw “only the profit.” Instead, you would request a partial redemption of ₦25,000 worth of units. After redemption, the remaining value of your investment will be about ₦100,000, although the exact capital represented by the remaining units depends on the fund’s current unit price.
If the InvestNaija app allows partial redemption:
Open the Paramount Equity Fund.
Tap Redeem or Withdraw.
Choose Partial Redemption.
Enter the amount you want to redeem (for
Thank you I plan to invest in the equity fund continually for the next ten years, so When the equity fund has made profits like up to 20%, is it wise to take profits and reinvest at a later date or I should let it be and just continue adding up
Thank you
See lessI plan to invest in the equity fund continually for the next ten years, so When the equity fund has made profits like up to 20%, is it wise to take profits and reinvest at a later date or I should let it be and just continue adding up