| How to invest in mutual funds? |
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jiten702
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| How to invest in mutual funds? |
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There are three basic steps for investing in mutual funds. They are:
Step1- Identify your investment needs:
-->What are my investment objectives and needs?
-->How much risk I am willing to take?
--> What are my cash flow requirements?
Step 2-Choose the right mutual fund:
-->The track record of performance over the last few years in relation to the appropriate benchmark and similar funds in the same category.
-->How well the mutual fund house is organized to provide efficient, prompt and personalized services.
-->Degree of transparency as reflected in quality of the fund house conmmunications.
Step 3-Select the right mix of schemes:
-->Putting all your eggs in one basket may not meet your investment objectives and needs. So consider investing in a combination of schemes to achieve your specific financial goals.
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Mon Aug 09, 2010 6:39 am |
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Tassus
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Ask around
Ask your colleagues, neighbours, friends and relatives. Someone will know an agent. Just ask them for his contact details or ask that he get in touch with you.
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Wed Aug 11, 2010 9:27 am |
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jason_simpson
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Even within mutual funds, diversification is a must. You must invest in different types of mutual funds and they should be from different Asset Management Companies (fund houses).
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Fri Aug 13, 2010 12:37 pm |
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financegenie
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If you're too busy to pick your own stocks but still want to get into the investment game, buy a mutual fund. Think of a mutual fund as a giant investment club with a few million members who have all hired a fund manager and a staff to pick and choose when to buy and sell their stocks.
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Fri Aug 20, 2010 4:22 am |
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Jackie101
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I consider one of the hottest areas in mutual funds today is overseas investment funds. Emerging economic powers like India and China are growing at rates that dwarf the U.S. as well as most European countries. Even with global turmoil, there are great buying opportunities overseas. There are a number of funds that are heavily invested in large corporations in Europe and Japan, yet do not include any of the newer emerging countries' companies.
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Fri Aug 20, 2010 1:05 pm |
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Hosannakk
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Investing in Indian mutual funds is an excellent way for small investors to start off with much less risk. What are these funds? A mutual fund is basically a company with a collection of stocks or bonds which can be bought and sold by a group of investors. Investors each hold a portion of these stocks, bonds and other securities.The investments are run by a professional manager who is responsible for buying and selling stocks and bonds to make a profit. This profit comes from the interest and dividends on those stocks and bonds. Securities that have increased in value may be sold and the mutual fund then makes a capital gain which the investors share in.
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Fri Aug 20, 2010 6:19 pm |
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Captonles
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Media reports suggest that the government is giving up on the fond hope of raising Rs30,000 crore from the capital market in a jiffy, to lower the fiscal deficit. Instead, it is resorting to the highly dubious practice of asking revenue agencies to whip and extort tax collections from the corporate world by fair means or foul.
The pride of the nation, National Thermal Power Corporation (NTPC), managed to get a subscription of 1.2 times for its follow-on public offer (FPO) with a retail participation for just 16% of the total 42.8 million shares reserved for the retail investors’ category. For its total shares on offer, NTPC received a dismal 80,000 applications from retail investors all over the country. Worse, it discovered that the French auction route was a mistake.
It is no surprise to us at Moneylife that the government was badly misled on the disinvestment issue with the impression that investors were waiting to snap up any IPO (initial public offering) or FPO of public sector undertakings (PSUs) at the highest possible prices. Somebody in the government must realise that the share prices of listed PSUs, based on a tiny floating stock, are unreal and it cannot hope to attract investors based on that benchmark. In fact, the finance ministry needs to face up to a macro problem that it has been ignoring all along—that retail investors are an endangered species. There is plenty of evidence of this in the investment pattern of mutual funds and IPOs of the past few years, but it is the failure of NTPC’s FPO that ought to ring some loud alarm bells in the government. Consider these facts:
1. Just 8 Million
The first page of the Swarup Committee report on “Investor Awareness and Protection” (2009) says: “Today, there’s an army of nearly 3 million financial advisers plus banking staff selling non-banking financial products. They serve about 188 million investors holding financial assets. Of these, 8 million investors participate in debt and equity markets, either directly or indirectly through complex and risk-bearing products like mutual funds and market-linked insurance plans.”
Read this again: Of the 188 million investors holding financial assets, only 8 million participate in debt and equity “either directly or indirectly” and these include mutual funds and market-linked insurance plans (also known as ULIPS).
This means that retail investors are bypassing the capital market, despite a five-year monster bull run when trading volumes soared, stock indices spiralled up (the Sensex shot up from around 3,000 to 21,000) and the salaries of the National Stock Exchange’s (NSE) top brass rose faster than the indices and the best Indian companies.
rack and pinion
Last edited by Captonles on Mon Aug 29, 2011 9:44 am; edited 2 times in total |
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Sat Aug 21, 2010 10:28 am |
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stockomni
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Asking investment professionals is definitely best but I'd also focus on doing high risk or low risk investments. Choose if you want risk or little risk and then go for the right investments according to that as well as your interests in the different companies
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Mon Aug 23, 2010 2:22 pm |
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Ashley Watson
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| Re: How to invest in mutual funds? |
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Mutual funds are not guaranteed or insured by the FDIC or any other government agency — even if you buy through a bank and the fund carries the bank's name, Past performance is not a reliable indicator of future performance. So don't be dazzled by last year's high returns,All mutual funds have costs that lower your investment returns.
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Thu Aug 26, 2010 7:40 am |
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adaidsphone
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Over the past decade, American investors increasingly have turned to mutual funds to save for retirement and other financial goals. Mutual funds can offer the advantages of diversification and professional management. But, as with other investment choices, investing in mutual funds involves risk. And fees and taxes will diminish a fund's returns. It pays to understand both the upsides and the downsides of mutual fund investing and how to choose products that match your goals and tolerance for risk.
A mutual fund is a company that pools money from many investors and invests the money in stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments. The combined holdings the mutual fund owns are known as its portfolio. Each share represents an investor's proportionate ownership of the fund's holdings and the income those holdings generate.
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Fri Aug 27, 2010 7:23 am |
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financegenie
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If you wish to invest online in mutual funds, please check the Mutual AMC website. Not all of them allow online purchase (e.g.Tata Mutual fund does not have online investing ability but birla, sbi does)
For the first purchase, most of them will ask you to subsequently sent PAN proof, and signature, thereafter subsequent purchase can be made online.
Thanks
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Wed Sep 08, 2010 6:04 am |
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kateoliver13
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For some investors, mutual funds provide an attractive investment choice because they generally offer the following features which are professional management, diversification, affordability and liquidity.
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Fri Sep 10, 2010 5:31 am |
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Jackie101
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Well, if you buy a mutual fund, you get instantaneous access to hundreds and thousands of the stocks and bonds of other companies. In case if you buy individual stocks separately to diversify your portfolio, you get exposed to more risk. You can also apply for funds online. Before investing in the top 10 mutual funds, you can compare mutual funds as there are a lot of types of mutual funds available.
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Sat Sep 11, 2010 4:33 am |
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moonraker1
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Really good information but continuous market watch will be more beneficiary.
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Sat Sep 11, 2010 12:05 pm |
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financegenie
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You have to understand basic difference between investing in mutual funds and FDs.
FDs are a way of earning guaranteed income. that is on the day of investment you know how much returns you are going to get after the term and you will get that for sure.
In case of mutual funds, your investment may go down if share markets go down, the best example of this is for those who invested in the mutual funds during the times when BSE sensex was above 21000 are now at a loss of over 40% on an avg.
The thing is those who invested in the same fund when the sensex was around 8000 have made double the money. So you can't just judge the mutual fund by its performance. As it is dependent on the market conditions.
It is your responsibility to decide whether you are ready to take that risk. If you plan to go for mutual funds and want some tax break then go for ELSS type.
Thanks
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Thu Sep 16, 2010 6:14 am |
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