4 Replies to “i am new/fresh and want to know how to invest money in indian share market/mutual funds.?”

  1. If yer nu tu invest, yu dont wanna put munee intu 1 kuntree, sertinlly not the “3rd werld” such as India.
    Yu need a jenral all-round all-purpus invest, such at 500 index.


  2. MUTUAL funds are investment vehicles, and you can use them to invest in asset classes such as equities or fixed income. wealth recommends that you use the mutual fund investment route rather than invest yourself, unless you have the required temperament, aptitude and technical knowledge.

    If you would like to familiarise yourself with the basic concepts and workings of a mutual fund, this would be a good place to start. Just follow this simple step-by-step process.

    Step 1: Understand why mutual funds are recommended

    We are not all investment professionals
    Mutual funds are like professional money managers, however a key factor in their favour is that they are more regulated and hence offer investors the ability to analyse and evaluate their track record.

    Investing is becoming more complex
    There was a time when things were quite simple – the market went up with the arrival of the first monsoon showers and every year around Diwali. Since India started integrating with the world (with the start of the liberalisation process), complex factors such as an increase in short-term US interest rates, the collapse of the Brazilian currency or default on its debt by the Russian government, have started having an impact on the Indian stock market.

    Mutual funds provide risk diversification
    Diversification of a portfolio is amongst the primary tenets of portfolio structuring. And a necessary one to reduce the level of risk assumed by the portfolio holder. Most of us are not necessarily well qualified to apply the theories of portfolio structuring to our holdings and hence would be better off leaving that to a professional. Mutual funds represent one such option.

    In Step 2 we discuss Selecting a Mutual Fund.
    Mutual fund investing requires as much strategic input as any other investment option. But the advantage is that the strategy here is a natural extension of your asset allocation plan (use our Asset Allocator to understand what your optimum asset allocation plan should be, based on your personal risk profile). wealth recommends the following process:

    Identify funds whose investment objectives match your asset allocation needs
    Just as you would buy a computer that fits your needs and budget, you should choose a mutual fund that meets your risk tolerance (need) and your risk capacity (budget) levels (i.e. has similar investment objectives as your own). Typical investment objectives of mutual funds include fixed income or equity, general equity or sector-focused, high risk or low risk, blue-chips or turnarounds, long-term or short-term liquidity focus.

    Evaluate past performance, look for consistency
    Although past performance is no guarantee for the future, it is a useful way of assessing how well or badly a fund has performed in comparison to its stated objectives and peer group. A good way to do this would be to identify the five best performing funds (within your selected investment objectives) over various periods, say 3 months, 6 months, one year, two years and three years. Shortlist funds that appear in the top 5 in each of these time horizons as they would have thus demonstrated their ability to be not only good but also, consistent performers.

    Diversify
    Don’t just zero in on one mutual fund (to avoid the risk of being overly dependent on any one fund). Pick two, preferably three mutual funds that would match your investment objective in each asset allocation category and spread your investment. We recommend a 60:40 split if you have shortlisted 2 funds and a 50:30:20 split if you have shortlisted 3 funds for investment.

    Consider Fund Costs
    The cost of investing through a mutual fund is not insignificant and deserves due consideration, especially when it comes to fixed income funds. Management fees, annual expenses of the fund and sales loads can take away a significant portion of your returns. As a general rule, 1% towards management fees and 0.6% towards other annual expenses should be acceptable. Carefully examine load the fee a fund charges for getting in and out of the fund.

    In Step 3 we discuss Invest, monitor and review.
    Having made an investment in a mutual fund, you should monitor it to see whether its management and performance is in line with stated objectives and also whether its performance exceeds or lags your expectations. Unlike individual stocks and bonds, mutual fund reviews are required less frequently, once in a quarter should be sufficient.

    A review of the fund’s performance should be carried out with the objective of holding or selling your investment in the mutual fund. You might need to sell your investment in a mutual fund if any of the events below apply –
    –You change your investment plan.
    For example, as you grow older you might adopt a more conservative investment approach, pruning some of your riskier (equity-oriented) funds.
    –A fund changes its strategy.
    A fund that alters its investment objective or approach might no longer fit your st


  3. As you are new to the specialized field of investment analysis and portfolio management we would recommend that you first read the following books:

    Security Market by Graham & Dodd
    The Intelligent Investor by Benjamin Graham
    One up on Wall Street by Peter Lynch
    Investment Analysis & Portfolio management by Prasanna Chandra

    For a further selection of relevant books you may consider doing a search at http://www.amazon.com

    Alongside the reading of these books you would be required to develop your own investment system and platform. Then you would be required to test and fine tune this investment system and platform with the appliaction of a suitable stock market simulator, may also apply pen and paper if you prefer.

    It is only after you have done the above that you would be prepared to face the vagaries of the stock market.

    Sincerely,

    Akash
    http://www.narachinvestment.com
    http://narachinvestment.blogspot.com
    http://feedproxy.google.com/narachinvest
    http://www.narachphilosophy.com
    http://narachphilosophy.blogspot.com
    http://www.narach.com
    http://finance.narach.com


  4. Hello.If you want to insure yourself and your family,it is a good option.But if you want to grow your money,then it is not a good idea as insurance is basically to insure yourself of money.This is the Era of Specialisation and insurance and growing money are two different fields and one should try to avoid both in one scheme(in case of ULIP).If you want to insure you and your family by taking life insurance,mediclaim policies,see to it that you consult a financial advisor and not just an insurance agent or anybody because every family is different and their insurance needs are different.Hope you understand this.
    My advice for your long term investment would be these fund schemes.These funds are Equity linked and have delivered good returns when the market has gone up and sustained the bad periods of the market since its inception.Hence they are the proved ones.They are tax free for upto 1Lac rupees invested in them.Equity linked Mutual Fund earnings are Profit (or) Loss earnings and not interests (or) fixed income earnings as in case of Balanced (or) Debt Funds.Try to invest in 3-5 schemes if you can to diversify your portfolio.They are 1)SBI Magnum Global-G(Blue Chip),2)SBI Magnum Contra-G(Midcap),3)Franklin India Prima-G(BlueChip),4)Sundaram Select Midcap-G(Midcap),5)Reliance Vision-G(Midcap),6)HDFC TOP 200(BlueChip),7)HDFC Tax Saver,8)SBI Magnum Multiplier Plus-G(BlueChip),9)SBI Magnum Taxgain-G,10)HDFC Equity-G(LargeCap)
    You may invest in any of these funds for your long term plan(above 5 years atleast) and you will surely get good returns.Remember invest 60% of your investments in Bluechip funds and 40% in midcap funds for a safer investment and minimised risk portfolio.Bluechip funds invest in companies which are large and the best and sometimes in Medium sized companies aswell.Midcap funds invest in medium sized companies only as they can fetch excellent returns on profiting.Also remember that do not trade mutual funds like shares by buying a scheme one day and selling it of next week.If you have already bought some schemes and if they are performing well,then dont sell them off until they start performing badly.Some people also think that if the NAV of a fund is high you should not invest.This is also wrong.Mutual funds are not shares that if the NAV is high it has reached its limit.Infact if the NAV of a fund is high it means that the funds past performance has been excellent and it has given good returns.So don’t listen here and there.Invest carefree.Remember the power of Mutual Funds lies in giving it time and not in timing the market.It can covert your money into multiple folds the more time you give it with less risk as time goes on.Even then if you are worried about timing the market then dont invest all your money at once.Spread the money which is needed to be invested in 12 months and invest.Although Systematic Investment Planning(SIP) is a good option but I feel the previous idea is much better for persons who have money to invest right now.SIP can be taken by people who want to invest regularly from their monthly income and want it to make a habit of investing money regularly to reap benefits after longer time(10-20 years).Like this the timing effect will be minimised.Even if you want to time the market,invest when the market is on its lowest point.For investing in mutual funds one does not require a demat account but nowadays the agents are misguiding people to open a demat account before investing in funds for their own benefit of comission.PAN Card is required if you are investing in mutual fund.Most investors also have a doubt that whether to invest in dividend re-investment or growth option or dividend option of a scheme.Frankly speaking growth and dividend re-investment options are the same.In dividend re-investment you get an yearly dividend(profit) from the fund posted to your house and that amount is re-invested into the scheme again,and in the case of growth you dont get the dividend(profit) posted to your house and the profit automatically will be invested along with original amount into the fund.For God sake dont opt for just dividend option as it will send the profit to your address and that money will not add on to the original amount.This will be bad for your long term prospect.If you are thinking that you are too old to give your investment,think again.No time is too late.Just start investing from today and you will never regret time.My sole intention is to create awareness among the investors and make their investments a success.Hope you do well.





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