MUTUAL FUND INVESTMENTS

IN THIS POST WE SHALL TALK ABOUT INVESTMENTS IN MUTUAL FUNS,WHICH ARE VERY POPULAR WITH INVESTORS because MUTUAL FUND INVESTMENTS ELIMINATE THE RISK OF DIRECT SHARE MARKET INVESTMENTS BY INDIVIDUAL INVESTORS AND THE INVESTMENT DECISIONS ARE MANAGED BY EXPERTS ON BEHALF OF THE INVESTORS.MOREOVER POOLING OF RESOURCES OF MANY SMALL INVESTORS IS POSSIBLE IN MUTUAL FUNDS ONLY. THE MUTUAL FUND MANAGERS INVEST THESE COLLECTIVE RESOURCES IN EQUITIES.DEBT FUNDS,SECURITIES/SECTOR FUNDS AND GENERATE RETURNS FOR THE INVESTORS THROUGH BETTER MANAGEMENT .
THE NAV OR NETASSET VALUE OF OPEN FUNDS ARE DECLARED ALMOST DAILY AND ARE TRADED LIKE SHARES OR CAN ALSO BE REDEEMED AT THE PREVAILING NAV.
IN CASE OF CLOSED ENDED FUNDS ,THERE IS A LOCK IN PERIOD RANGING FROM 3 TO 10 YEARS .ONLY THEN THESE UNITS IN CLOSED ENDED MUTUAL. FUNDS ARE TRADED OR REDEEMED .
SIP OR SYSTEMATIC INVESTMENT PLAN IS A BETTER ALTERNATIVE WHILE INVESTING IN MUTUAL FUNDS AS THIS RESULTS IN RUPEE COST AVERAGING AND IT DOES NOT MATTER VEERY MUCH WHETHER THE MARKET IS IN UPTREND OR DOWN TREND.
BASICALLY MUTUAL FUNDS INVEST IN EQUITIES OR DEBT SECURITIES OR SECTORS LIKE POWER SECTOR OR BANKING SECTOR ETC....
ONE HAS A CHOICE OF INVESTING IN ANY TYPE OUT OF THE ABOVE 3 CATEGORIES,OR PARTLY IN EQUITY AND PARTLY IN DEBT SECURITIES CALLED BALANCED FUNDS .A SWITCH OVER AMONG THESE TYPES OF FUNDS IS ALSO ALLOWED SUBJECT TO APPLICABLE RULES.
IN INDIA,RELIANCE MUTUAL FUND HAS STARTED SIP AMOUNT AS LOW AS RS 100 P.M.
MUTUAL FUNDS OFFER LIQUIDITY, FAIR RETURNS ON INVESTMENTS AND ALSO SECURITY COMPARED TO DIRECT STOCK MARKET INVESTMENTS BY INVESTORS.