Tell me in detail about investing in mutual funds?

Answer 1

Had some mutual funds in the past and was very unhappy with my returns and the fees and yes you can lose money on mutual funds and yes it can be a big loss. Take the time and look at what some of these mutual funds invest in. Allot of these funds invest in allot of good companies that pay good yields. When you look at their stock investment, these returns back to the mutual fund shareholder they just don't add up and also is very little to it's shareholder.
My only suggestion would be is just look into some good growth stocks that pay a nice dividend. Some of these stocks have rewarded there share holders every year with dividend increases.There is also allot of other stocks such as banking stocks that are paying around 4.5% yield to its share holder.

Answer 2

Mutual funds are just pooled money that buys whatever is the mandate of the fund.

For instance. A US equity mutual fund, would buy a basket of stocks that are based in the USA. The money manager would have the market analyzed and he would make up the fund with a diversified portfolio of stocks he feels will make a superior return.

But mutual funds are available for any style or idea in investing

From the very simple Money market fund that buys interest bearing notes of governments less than 1 years duration, through, bond funds, blue chip equity funds, mid cap equity funds, small cap equities, International equities, country specif funds, regional funds, resource based funds, precious metals funds, energy funds and the list goes on.

They all have varying degrees of risk and expected return.

Some funds have a buying charge called a "front end load"
Some have a selling fee called a "back End Load"
Some have both, some have fees that are refunded if you keep the fund for a certain time frame, and there are "No-load" funds

All funds take money out of the value of the funds for expenses. This is called the "Management Expense Ratio" (mer), You don't pay the MER, it just comes out of the money in the fund and you never see the charge.

Most places have a minimum that you must invest and then any other investment in the same fund could be lesser in value(read the rules.)

Fund companies want you to invest for the long term and will not allow trading. (Buy Now, sell next month, buy again, sell in 2 months) that's it in a nut shell, it is an easy way for a small investor to get good diversification for a small amount of money.

Answer 3

mutual fund enables investors to pool their money and place it under professional investment management. The portfolio manager trades the fund's underlying securities, realizing a gain or loss, and collects the dividend or interest income. The investment proceeds are then passed along to the individual investors.

There are two types of Investment options :
1. Growth
2. Dividend (Pay-out and Re-investment).

In Growth you donot get any dividend and the money gets multiplying, whereas in Dividend Pay-out, whenever the Fund Manager declares dividend you get back some money.

In Mutual Funds you donot get any shares but units.

Answer 4

Mutual fund best suits for those investors who cant dedicate time for analysis of equity investments. By investing in mutual funds you hand over the responsibilty to professional fund managers. To view the ratings of mutual funds, the best website is

http://valuereasearchonline.com . This fund reviews monthly the performance of all the indian mutual funds

Answer 5

Here is a good guide
http://finance-information.blogspot.com/2006/12/looking-to-spread-your-investments.html

Answer 6

it will vary from country to country,, but it is the safest way to invest the money