There is a whole set of financial experts telling you that this global slow down is the right time to invest in the stock markets. The safest way to invest is by jumping on to the bandwagon of a successful mutual fund. If you are the kind who knows nothing about financial matters and is keen on making some investments read on.
What is a Mutual Fund?
It is a place where you can invest in a number of companies in one place. The fund manager picks the best companies that he believes have a potential to grow. Then he invests the money in the fund with some of these companies. He regularly checks their performance and if he feels the company is about to lose money, will pull out the funds.Click this link now sit mutual funds.
It helps you because you don’t have to study the stock market and check for the best companies. The risk of losing money is minimized. The day to day headache of checking on your investments is not involved. It is a simpler way to invest in the stock market with out having the regular nuisance involved with such investments.
How does one invest in one?
You can choose to do it through a broker who will send home a representative to collect your relevant documents and the cheque. Or you can open up a demat account and invest with it online. The procedure is well explained and as long as you have the correct documents to support your investment there should be no problem getting the investment done.
For the first time, it is best to be guided by some one who has done the investing before. This will ease out many of the anxieties that you will have. Plus you will trust the friend who tells you the details more than an agent for the mutual fund. So get advice from some one you know who is investing in mutual funds.
Choosing the right Mutual Fund
This is again a bit tricky and some amount of research is involved. There are some magazines and online sites that will give you the histories of the top performing funds. You need to pick up a fund that has been performing well consistently in the last five years. A mutual fund belonging to a good business house will also help. The brand does count here much more than in the clothes you wear.
Think of the top financial companies that you have heard about. Think about who has a good reputation. Then look for their top mutual funds. Are they performing well over the last five years? Then you know which one you should be investing in. Do remember that past performance is not a great indicator of future performance specially given the fickle nature of the stock market.
How long do you stay invested?
The basic minimum frame for a mutual fund should be three years. Do not withdraw your money the very first time the NAV or Net Asset Value drops. This way you will lose out on the cash you invested plus incur an early exit fee. These dips and raises are part of investing in mutual funds. Take it in your stride. Don’t keep track of the fund daily. It will stress you out and achieve nothing.
Monitor them on a fortnightly or monthly basis. If you feel that the fund is not doing as well and you want to take out your money. Talk with the broker or friend who advised you to invest in it. Get the opinion of the stock analyst and the websites. Make an informed decision. After all it is your hard earned money in there.