Jun 13, 2009

How to Make money by Investing in a Mutual Fund?

This article lays down the basics of Mutual Fund Investing:

1. This is a pertinent question asked every now and then that which is the safest method to invest in mutual fund to make money and prior to that one must understand the basics of mutual fund.

2. A mutual fund is a tool by virtue of which it accumulates money from the investors and invests on their behalf in stocks and bonds etc; however same is undertaken with the help of professionals who are paid for the same.

3. One should choose and invest in a mutual fund as per an individual risk profile and thus one has to first of all analyse the fact that how much one is ready to take risk in life. If one is young one can afford to take more risk and thus can invest more in equity oriented funds and should move towards debt oriented funds as one grows old. A safe yardstick is to find the percentage for investment in equity by reducing the age from a figure of 100 to get the required percentage for investment in equity.

4. One must undertake the research and risk assessment before purchasing any mutual fund as past performance is no guarantee for future performance. However if one is not aware of anything about the investment or stock market than the investment through mutual fund is the best bet to avoid losing money.

Also Read: How to make money in the stock market?



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