First timer.. Which Mutual Fund to go for?



This is the first time I am going for a Mutual Fund and would like to invest 10K initially and expect to get the returns by max 3 years. Also how much can be the returns?
First of all I am an Indian, aged 31+. What about this: http://www.moneycontrol.com/mutual-funds/nav/reliance-regular-savings-fund-balanced-option/MRC100

First timer.. Which Mutual Fund to go for?
Rate these answers

6 Replies to “First timer.. Which Mutual Fund to go for?”


  1. That is a massive question. it depends on your risk appetite! But if you want high returns you also run the risk of losing alot of money in 3 years. Try something in emergign markets perhaps, or Mid cap companies, but with soo many funds i cant possibly recommend one.


  2. For 3 years, your best bet is to invest in Energy and Precious metals.

    The yield would be the highest.

    Also, you could invest in the Canadian Financial sector as well (it’s not as profitable as the first 2 funds).


  3. The returns depend on the risk level. There are aggressive growth mutual funds that you may get 20% annually if the market is going up. Or you may lose 20% if the market goes down. A value fund or dividend stock fund may not have as much upside, but not as much risk either.

    If I were you I would go $ 6,000 into a US stock index fund and the other 40% into an international fund with emphasis on emerging growth countries (China, India and Brazil especially).

    Try Vanguard or American Century Investors.


  4. Whoe, hold on there partner. There are to many questions that need to be answered first.
    1. Your age. If you are young , then you can take more risk.
    2. Your risk tolerence. How much risk you are willing to take.
    3. For this I need my crystal ball. Since there is no way to tell if the stock market is going up or down.
    4. There are many mutual fund companies out there and most of
    them will give you a fair deal and guide you to the proper fund.
    5. Try to be satisfied with making 10%.

    I personally like Fidelities “Low Priced Stock Fund.”
    Check out some of these;
    Fidelity
    Vangaurd
    TR Price
    American Century


  5. That is a very complex question and there is no easy answer. There are thousands of mutual funds to choose from. The correct funds for you will not necessarily be the correct funds for me. It all depends on our ages, our goals, and our tolerance for risk. You need to educate yourself before you just dive in. Read a few books about investing first. “The Truth About Money” and “The Lies About Money” by Ric Edelman are very good. “Ready, Set, Retire” by Ray Lucia is also very good as well as anything by Ed Slott, who talks about IRAs is also a good thing to read. (If you don’t have a fully funded Roth IRA yet, then use $ 5K for that first. Check out the Roth IRA calculator at dinkytown.net to see what a Roth IRA can do for you. A Roth IRA can make anyone a tax free millionaire. It is the greatest gift that Congress has ever given the people of the US. Those books will give you an overview of investing and how investments work.
    There are two types of Mutual Funds: Closed End and Open End Funds otherwise known as Load or No Load Funds. . (Whether you pay commission up front or when you sell.) Within those types there are 48 different categories of mutual funds listed by Morningstar and that doesn’t include the Index Funds.
    If you believe that the stock market is going to go up over the next 5 years, then invest in an Index Fund to start with. That is a fund whose return follows the market. If the market as a whole goes up, then the mutual fund will also, if the market goes down, so will the fund. There are many types of Index Funds they can follow many different indexes. The New York Stock Exchange, The NASDAQ, Commodity stocks, to name a few. That will put you into the market, with a lower risk overall, while you learn.
    In my opinion, only money that is to stay invested for the long term (over the next 15 years at least) should be in the stock market. For the short term (3 years), you are just gambling that you pick the right fund or funds. Look at what happened to the markets in 2009. In March, the market sank like a rock along with almost all of the stocks. If you had invested in February, you would have lost almost 1/2 of your money (on paper) during that month. However, if you had invested in June 2009 and waited until now, you would have made over 30% because the markets have been rising steadily. What a difference a few months makes! That is why you should not invest in the stock market or stock mutual funds for the short term of three years. There is just too much volatility for that short of a term. Over the past 110 years, the NYSE has averaged about an 11% return for any 30 year period chosen. That includes the Great Depression of the 30’s and the Great Recession of 2009. But that also means that the investment had to stay in at least 30 years, through good times and bad, wars and peace, and all political and social upheavals of the past 110 years to get that return. That is if you stayed in the whole time. Those people that “traded” or jumped in and out or “timed the market” and guessed wrong and stayed sort of in the market or sort of out of the market for a 30 year period but who missed the 90 best trading days (90 days out of 30 YEARS) only averaged about a 3% return. So you can see that 3 years is just too short a time for the stock market. If you want to actually “invest” for 3 years, look for a fixed income investment like a T Bill, a CD, or a TIPS (Treasury Inflation Protected Security). Those pay a fixed rate of interest for a fixed period of time and you get all of your principal amount back. Stay away from bonds because, unless you buy a bond and plan to keep it until it’s call date, the value of a bond rises as interest rates go down and the value falls as interest rates go up. Given the fact that we have historic low interest rates right now, I would bet that interest rates would go up over the next three years so that means bond values will go down.

    I really recommend that you do the reading before you do any investing. Putting your entire amount that you are investing into any one investment is exceedingly risky. You need to diversify your portfolio to lessen your overall risk.





Leave a Reply

Your email address will not be published. Required fields are marked *