Why Investing Mutual Funds Give You Added Security

Investing mutual funds are some of the safest possibilities available to those who still seek to keep a little potential for high growth. The concept of mutual funds is simple enough, and has been known for a great many years. Instead of investing your money into the stock of one company, with all of the attendant risks that entails, you pool your risk with other investors by taking a part of a larger investment which is spread across several companies. For further diversity, the investment can be spread across several market sectors.

The upside of mutual fund investing is that you have a built in diversification to your investment portfolio, and are totally protected against the possibility of complete loss. Your investment can still lose value in the short term, as a severe market reversal tends to affect all stocks to some degree. History shows, though, that the market as a whole will always bounce back from this and eventually return to new market highs. The same cannot be said of individual shares, which can lose their value completely if the company goes under.

When you invest in mutual funds, you effectively hand over immediate control of your investment to a find manager. The manager will have the choice of which individual companies to invest in, as well as when to sell the stock and change position. This is seen by some as a disadvantage, but unless your record as a buyer of stock is better than that of the fund manager, it is really a blessing. Fund managers have years of experience in the industry, and they know that you can pull your money out and invest it somewhere else any time you choose.

If mutual fund investing is designed to increase diversification and safety, it can be made to do this even more by diversifying into different markets or countries. You can buy into mutual funds which deal with the bond market, where the potential for spectacular gain is completely sacrificed for the great built in security and safety, or you can invest in a fund which holds overseas stock. If you do this, make sure you know what you are trying to achieve.

You can buy investing mutual funds which are based exclusively in one country, which is ideal if you believe that one market is going to bounce back more strongly than any of the others. You will still have diversification from within the fund, with money in different sectors and companies. On the other hand, you can diversify your investments still further by buying into several different countries at once. If localized conditions send one market into free fall, you will have built in insurance against heavy loss with your overseas based investing mutual funds.

 

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Revising payment instructions for funds - Business Line

Revising payment instructions for funds
Business Line
Investors may select the 'Change bank mandate' option in the auto-debit form and submit it at the mutual fund's branch. Most investors who use the systematic investment plan (SIP) route provide auto debit instructions towards SIP instalment amount.

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Small investors logging out from SIPs - Business Standard

Small investors logging out from SIPs
Business Standard
And the current month, appears to be the same or worse, say fund managers. EURReduction in SIP is not new. It's happening over the last six months,EUR says Sanjay Sachdev, chief executive officer at Tata Mutual Fund. In February too, the scenario has not .
Revising payment instructions for fundsMyiris.com

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Poor returns hit MF investments through SIPs
Investment in equity mutual funds through systematic investment plans (SIPs), once a steady route of sticky money inflows to the fund industry, is now being hit...


Sebi tightens valuation norms for liquid funds
The Securities and Exchange Board of India (Sebi) said on Saturday it was tightening the valuation norms for liquid funds...


Use the current market situation to clean your portfolio, says Tata MF's . - Businessworld

Use the current market situation to clean your portfolio, says Tata MF's .
Businessworld
Equity has been a key component of Bhupinder Sethi's investment and he continues to invest through the systematic investment plan (SIP) in his own managed funds. Talking to Businessworld, the head of equities at Tata Mutual Fund feels the markets can .

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Pramerica MF To Acquire 39% Stake In Prudent Advisory - DealCurry

Pramerica MF To Acquire 39% Stake In Prudent Advisory
DealCurry
By : Charmi Gutka | 21 February 2012 Pramerica Mutual Fund is planning to acquire 39% stake in Prudent Corporate Advisory Services Limited for R20Cr. The deal will help Pramerica, who was planning to start its PMS segment to get clients from Prudent's .

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Five local fund houses to manage Kuwait's $1-billion India portfolio
Kuwait Investment Authority (KIA), the Gulf state's sovereign wealth fund, has selected five domestic mutual fund houses to manage its India equity portfolio...


 

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