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Showing posts with label MF investing tips. Show all posts
Showing posts with label MF investing tips. Show all posts

Tuesday, January 27, 2015

SIP-Systematic Investment Plans - a guide

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(27-1-2015 LiveBombayStockExchange Investment tips series) - Systematic Investment Plan (SIP) is method for investing your money in Mutual Funds, It can be compared with Recurring deposits and the only difference is that a person investing in SIP can make losses. whereas a person investing in recurring deposit would gain a fixed interest for

Saturday, July 20, 2013

Mutual Funds Investing - Basics | Working | Benefits

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Mutual Funds basics:
Mutual funds is a way of investing in stock markets when group of like minded small investors club their money together and then hire a manager for the money to invest into stock market, All the analysis activities in choosing the stock is put on this manager. Advantage of Mutual Fund investing is that by pooling the money together, investors can target broad range of stocks which was not possible if they wnet alone for investing in stock market. These group of investors would not meet each other ever though.

How Mutual funds work
There are numerous Mutual Funds companies(MFC henceforth) in India. When a person invest in a MFC it buys an ownership stake in the company(kind of share holding but here it is called NAV or net asset value). Price of single ownership unit in a Mutual Funds company is called Net Asset Value or NAV. for eg if you invest INR 10000 in MFC with NAV or INR 100, then you have 100 shares of this Mutual Funds Investing company. These MFC's hire fund managers for analysis and investment of the collected money into stocks, they keep certain fees though. There are numerous MFC's which specializes in stock investment in a particular sector stocks like 'Oil and Gas' , ' Infrastructure' or 'Information technology' etc. If a MF's has portfolio of 500 stocks then MF investors becomes miniature owner of that stock.

Benifits of Mutual Funds Investing
Less capital required - You can invest in mutual funds with a very less amount and still own large portfolio which might not be possible if you invest individually, because in individual investment it is likely that you would run out of money befor purchasing nth stock.
Ease of buyinh/selling: Mutual fund company will give you cash whenever you're ready to sell the stock. Investors who own closed funds can also sell at any time.
MFC are highly regulated: A group has to satisfy lot of regulators requirements before starting a Mutual Fund company, hence there are very less chances of fraud, you will not hear that fund manager took the money and dissapeared (loss is another thing).
Investments are Professionally managed: Mutual Funds companies higher professionals for managing money and doing market analysis before investing money in best stock option available, Individual investor might not have time for doing self analysis before stock purchase.

So we can conclude Investing in Mutual Funds is a good way for investing in stock markets, but as we all hear now and then "Mutual Funds investments are subject to market risks, please read the offer document carefully before investing"

Saturday, July 2, 2011

More About Mutual Funds Investing

I have already posted on mutual funds investing tips couple of times and continuing the same here too.

Here is my another post on Mutual funds basics and Mutual Funds Investing tips. This post should be read and understood along with my following posts on mutual funds:

Mutual Funds Investing tips
How Mutual Funds work

There are many different types of mutual funds available in market,One mustsee the NAV value of the mutual fund.

Here are Types of Mutual funds availabe:

Money market Mutual funds

These are the safest type of mutual fund because they invest in cash. You deposit a fixed amount for a fixed period of time, ranging anywhere from 30 days to one year, and you’re almost certainly guaranteed a fixed rate of return. You’ll typically earn about 2% to 3% more interest than if you place your money in a high interest savings account.

A money market fund is right for you if you are conservative with your money and have a low tolerance for risk when it comes to investing.

Fixed income Mutual funds

This type of mutual fund invests in a combination of government and corporate securities, such as treasury bills, bonds and mortgages. They provide fixed periodic payments with the possibility of some capital gains. These funds are usually low risk and dependable overall; however, their value is affected by changes in interest rates.

A fixed income fund is right for you if you are looking for a relatively safe way to introduce yourself to investing and security, stability and moderate returns are also important investment goals for you.

Balanced Mutual funds

These funds include a little bit of everything—stocks, bonds, cash and mortgages—in order to provide a combination of income and growth. These funds seek to maximize the growth potential of your investment while preserving the capital.

A balanced fund is right for you if you are looking for long-term growth possibilities with stability. Balanced funds tend to be costly but can be a worthwhile investment if want a diversified portfolio in one fund and you don’t want to manage your own asset mix or don’t have an advisor to do it for you.

Dividend based Mutual funds

These funds are designed specifically to provide maximum dividend opportunity. A dividend is how a company pays the people who own its stock. Dividend funds invest in high-quality common shares from blue chip companies (i.e., well-established, financially-sound companies), such as Reliance Industries or Infosys for example, and preferred shares. There is the potential for long-term capital growth. Dividend funds also receive preferential tax treatment, which reduces the amount of tax an investor has to pay on capital gains.

A dividend fund is right for you if you have an interest in investing in corporations and receiving any profits made by the fund on a regular basis.


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