Mutual Fund Investment – A better option for the middle class
Posted by admin on Sep 13, 2010
Savings is a tough deal no doubt, but it seems even tougher when the matter of investment comes into question. In fact we become confused while deciding where and how much to invest. So many choices flicker in our mind. Banks are coming up with many dynamic plans, investment in share market has become very convenient today, mutual funds are reflecting high returns, insurance companies are offering high returns so on and so forth.
In the last 6 months banks have increased its interest rate against Fixed Deposit (FD) scheme. There has been a competition among banks (private and nationalized) to offer higher rate of interest from FD account. Many people are also speeding up to reach the same. But for me, it’s not a good choice. We can put limited amount of money in it and choose Mutual fund investments for getting higher return.
An effort has been made to clarify on how Mutual Fund investments work in a question-answer set-up. Please don’t hesitate to ask me if any misunderstanding arise.
What is Mutual Fund?
Mutual fund is a financial intermediary that allows specific finance organizations to reinvest in different stocks and bonds. Generally, commercial banks act as the broker of such funds.
Mutual fund investment – Few high return areas
Posted by admin on Sep 11, 2010
Apart from maintaining a savings account in Bank, we can think of investing a part of our money in few high return areas. Many of us invest money in the share market, but it’s not a cup of tea for everybody. Mutual Fund is playing as a major role in the dynamic investment sector these days.
But the problem arises when we need to decide which fund to choose, how much to invest, etc. New funds are coming up each month. When we study the performance of last few years for some good funds, we end up with a mixed result. On the other hand, fund brokers don’t guide in the right way as they have targets to promote new funds. So ultimately it’s very difficult to come up with some fruitful solution.
Here I have tried to put forward few suggestions that may help you out taking a brave decision:
- Long termed plans: Mutual funds are divided into two basic categories; a) open ended funds b) locked period (long termed) funds. In case of long termed funds investors can withdraw money only after the locking period is over. So the fund raisers can reinvest the money in a better way. They don’t have the tension / headache to refund money to the investor at any point of time. Naturally better returns can be expected from such funds.