Learn About Mutual Funds

What all we need is to invest/save at least a bit of hard earned money for future.And this money should give some returns in the future instead of getting back the same amount of money what we had saved or invested.Atleast the returns should be above the inflation rate if not very high.There are lot of ways of investing the extra money .they can be grouped together as follows.
1. Land
2. Gold
3. Share Market
4. Post Office savings
5. Bank deposits etc.

Out Of the above we are now going to see how to invest our money in mutual funds as this may be the better way of investment for the common people.Gold & Land though it may give good returns , needs lot of money to invest which the common people will not be able to do so.
Bank and Post Office deposits may not be giving good returns or will give low returns.
Share Market Investment though with little amount of money it can be done and good returns can be got needs carefull investment and needs to be watched closely otherwise you may loose your money.in our daily routine most of us will not be able to do it.
So this site will give you in detail about mutual funds and ways of investment and all about that.

What is Mutual Fund?
In simple terms it is a way of collecting money from people and investing that money in Shares,Debts etc to give good returns.

Who are all run this Mutual Funds?
Banks,Big corporates companies, Finance companies etc Run the mutual funds.

What is the Profit for the Mutual Fund Companies to Run this?
Should I pay any money to them?

There is a profit for the mutual Fund companies as well as for us.The mutual fund companies collect the money from us mostly in the form of Entry Load and Exit Load.
They collect 1-3% depending upon the company as entry load .If you are investing directly then some companies won’t charge this.If you are taking or exiting from the mutual fund before the said period there may be exit load .The companies take 0.5to 3% .
This Entry Load and Exit load depends upon the companies and it varies with the amount that is invested.


Why Should I Invest in Mutual Funds.

You may thing that instead of investing in mutual funds you can directly invest them in sshares.That is correct but the advantage is that they invest huge money and next thing is that they invest the money in different sectors so that if one sector is doing bad there may be profit in other sector.and they watch the market closely and their invested companies.If they are doing bad they may exit from them quickly.

How to Invest in Mutual Funds?
It is easy nowadays as most of the mutual funds companies are there in most of the places.just we can ring up to them and their representatives will come to your place and explain about the mutual funds and their growth etc.
ALL WE NEED IS A PAN CARD TO INVEST.
Pan card is a must to invest in mutual fund.Nothing more is needed except the money in the form of check.

When Can I Invest ?
Investment in mutual funds are similar to share markets.Thats is 2 ways
1.During New Fund Offer (NFO) period where the fund NAV will be Rs.10.
2.In Open ended funds the Mutual funds can be brought after the NFO period also at the latest NAV price which may be Rs.20 or RS 30 or any such amount.

What is NAV?
NAV in simple terms is the Net Asset Value.It is the Total value of the fund divided by its number of units.
For eg if you are investing Rs.5000 in one fund during NFO period ,then the NAV of that fund will be Rs.10 and the units which you will get is 500(these are done without considering the entry load or commission).
If the NAV of a particular Mutual Fund is 30 ,then the number of units which you may get for the same amount of money is 5000/30 that may be approxiametly 166.66 units.

Which is Better? New Fund Offer or Old Mutual Funds.
Though the New Fund offer will offer you mutual fund at NAV of Rs.10 ,since we do not know the performance of that fund it is difficult to say it is good.
Though the Old mutual funds in the market may have high NAV rate ,by analyzing the performance of the fund,we can invest in that and good growth may be achieved.