mutual fund or stock market?



My age is 40 and all family depends on me also my income is limited like 15000/- per month Should I invest in mutual fund or stock market other way in Bank FD is good. Give your view.

mutual fund or stock market?
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10 Replies to “mutual fund or stock market?”


  1. Hi, With respect to the details you have provided here would arise some questions such as – why you want to invest in mutual fund as in your objective is to gain profits in short term or you have save some money for the future. Because, Bank deposit will gives you fixed amount of money at the allotted time period which you cannot break in between when you are in need of money and if you do that then you would not get the interest rate on the amount you fixed whereas, in mutual fund you will get multiple option to gain profits in short and term investment plan. For that, you should have an understanding of mutual fund industry and its functionality in the market. I would suggest you take help from your financial advisor and discuss with him about the investment plan and then go for any investment plan. As you said, your income is limited to 15000/- per month then I think you should checkout reliance mutual fund SIP investment plan which will yield you good returns. But, before that, speak to some expert who could help you choose the right investment schemes for you.


  2. If you invest in a MF, you have turned that responsibility over to someone else. To me, they are mostly the same, in general, in terms of results. Fewer than 10% can beat the Dow or other index it follows because of their fees. Why would you pay someone you don’t know, whom will almost certainly underperform the market, an annual fee of 2.5% to do something you can do yourself, and do it better by buying an ETF, without any input from you after the initial purchase? An ETF is a publicly traded “Exchange Traded Fund, that trades just like a stock). Just buy the Diamonds (the DJIA ETF) if you want to let it ride on the Dow, or the Spyders (SPY – the S&P 500 ETF), or the Nasdaq (QQQQ), or diversify across the entire market by buying all three. The ETF’s trade just like a stock or MF. If you want to diversify, and you want to Buy and Hold, buy an ETF.

    A MF is always “in” the market, so you are at the mercy of the ups and downs of the Dow. You are unable to manage your risk with a MF, so you can’t put a Protective Stop on a MF, at say 10%, to lock in your profits when the market goes down. You don’t have a clue what’s going to happen. That is not my idea of investing.

    Actually, if done properly, it is more work to investigate all of the MF’s and their advisors and their traders and their fees and their methods, than it is to investigate all the similar applicable info about stocks. To me, it’s more like a conscious choice to be ignorant, to simply and blindly turn your money over to a stranger because they are “listed,” like you do at a bank. Stocks are “listed,” as are commodities and ETF’s and everything else. With a mutual fund, you’ve just added a whole new set of unknowns to the equation.

    The best you can do in any investment is try to increase your odds of success and reduce your risk. You can do these things yourself, but not in a mutual fund.

    MF’s are so 20th Century. Relics of the past. Unnecessary. Buy an ETF. Or sell an ETF short and bet on the downside. There are two sides to every market, not just the upside.

    Like when your teenage daughter fails to come home on time, you worry because you don’t have enough information to “know” what will happen. You go through all of the possible outcomes, but because of a lack of information and being uninformed, they are all left up in the air and equally unpalatable except for the one outcome you “wish” and “hope” for.

    But with investing, just a little foreknowledge and information can make all of the possible outcomes known. It takes some hard work and learning, but better than being the anxious parent, hoping and praying and wishing for your daughter to come home.

    If you do your work, evaluate the risk, identify entry and exit at support and resistance levels or use whatever signal generator you are comfortable using, and apply good money management techniques, then you’ve done all you can do, and no amount of worrying or “hope” or “wishing” will change the outcome. You know what yours risks are and how much you can lose, and your profit is open-ended.

    This is why mutual funds (mf) and investment advisors managing your money doesn’t make any sense to me. You are the anxious parent, waiting for an unknown outcome without any control over your own future. You can do the same thing a MF can do by buying Index ETF’s. But you can also take profits off the table, add Protective Stops to limit your risk, and stay out when risk becomes unpalatable. You can also bet on the downside of the market (short), whereas a MF cannot. A MF is always “in” the market (long), exposing you to enormous risk and “worry.”

    You cannot avoid or escape risk. You can put your money under your mattress, and inflation will eat at it, or the rats will, or there might be a fire, or a robber may take it. But you can manage risk, if you invest it properly. This presuposes you have foreknowledge.

    Most people seem to choose ignorance over knowledge, and want someone else to take responsibility and provide solutions for all their problems. And then we ask silly questions like “would you relax, or would you worry?”

    Have some more Hopium.

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  3. Start using SIP (Systematic Investment Plan), its related to mutual fund. You can start SIP investment as low as 1000/ Rupees. This is one of the best investment for higher gains in the future.


  4. It all depends the amount of time you want to dedicate to your investment.
    A mutual fund will provide you directly with the diversification needed (across various assets). You will have to do your due diligence yourself by checking for example the history, the fees, the underlying of the portfolio. To elect a mutual fund you can go to the morning star website,
    If you have enough money and enough time, you can elect you stock directly, you will save some money since mutual funds charge between 0.5% and 2 % of fees each year. You will have to invest across at least 20 different stocks among various industries. Elect your stock based on digging into the financial statements of the company.
    It is a lot of effort but rewarding.
    If you have really no time look for the advice of an independent financial advisor.


  5. I would suggest you to go for Mutual Funds investment, as stock markets are comparatively risky. As you said that your whole family depends upon you then it is advisable to go for safer investment options like mutual funds only. Moreover, I would also suggest you to consult some experts or reputed financial firms for mutual funds investment advice so as to get not only guaranteed returns but also optimum returns.


  6. You have started a bit late with investments. But again, you are still at 40 and have quite a bit of time to grow your money till retirement. To reach your retirement goals, you need to be a bit aggressive with investments now – but not take too many risks at the same time.

    I suggest investing a minimum of Rs 5000 (if you can) in 2 diversified large cap or mid cap equity funds from good companies like HDFC or DSPBR or Reliance. Some sample funds are HDFC Equity (Growth), HDFC Top 200, DSPBR Equity (Growth) etc.

    Open a SIP (Systematic Invest Plans) in a couple of diversified equity funds as above and invest every month, each month regardless of market ups and downs. You will emerge a winner in a few years.

    Good Indian equity funds typically deliver better returns than Sensex itself. They are better than FDs. Investing in stock market directly is risky without knowing which company to invest in. Also keep in mind that in mutual funds – mid caps funds (though a bit risky) deliver better returns over long term

    You can also find more info at http://www.valueresearchonline.com and http://www.moneycontrol.com


  7. Of-course stock market if you are new to market …you can nifty ETF like NIFTYBEES every month some unit this will give u more returns than mutual fund……





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