The agency pools in money from each of its own investors that is the public and larger investors, using this as investments in securities and markets as per their objectives. Often a mutual fund agency employs many funds managers who have knowledge on how to predict the market and using their intuition and knowledge play with the investor’s money.
Regardless of how the mutual fund companies perform, it is still a safer choice for a general investor to invest his money into. With the decrease in interest rates in the past few years, mutual funds are coming into the lime light. Mutual funds, thanks to their higher pay rate are preferred over fixed deposits and other bank based investments. In fact, many banks have themselves understood this and diversified into the investment market as well. Specifically, in India, almost every bank has its own mutual fund and vies for a share in the money market mutual funds. Unlike other markets, the way to dominate the mutual fund world is to be a consistent performer. This means producing a profit every year on top of the total investments.
There are many mutual funds India such as open end funds, closed end funds, large cap funds, mid-cap funds, balanced funds, equity funds, growth funds, no load funds and exchange traded funds. Each has its own specialty and its own diversification of investment. Which one would suit whom, is a matter that fund managers can only advice one on. All these funds are however, affected by a vast number of factors ranging from the current market conditions (stock and other markets), the economic progress of the country, the GDP, the inflation, the forex etc. Because of a diversified investment portfolio of a mutual fund, the losses incurred at times of recession are not huge compared to the gains witnessed in booms.
Investment magazines, newspapers publish weekly and monthly reports on mutual fund performances and give mutual fund ratings that can help one to decide on the current top mutual funds of the country. However, today’s top performer can become tomorrow’s worst player in the market. To avoid this shortlist a few mutual funds and analyze their past few year’s performance, if possible try, and get at least 10 years of performance. After all, today’s poor performers are tomorrow’s shining investments!
I have a web site where I research penny stocks and stocks under five dollars. I have many years of experience with these type of stocks. If theirs anyone thats interested in these type of stocks you can check out my web site by just clicking my name. I would like to comment about mutual funds. I think mutual fund are an excellent way to go for inexperienced investors as well as experienced ones. theirs actively managed closed end funds and open ended funds' as well as indexed open ended funds and closed end funds. Along with exchange traded funds and closed end funds that invest in one single country. And exchange traded funds that invest in narrow sectors like gold stocks silver stocks housing stocks. I particularly like narrow sector funds that way you can buy a whole basket of stocks in one narrow category like for example airline stocks' this way you need not worry about what any one particular stock in a specific industry does because you own them all. The only type of exchange traded funds I don't like are funds that use leverage to try and magnify returns by double or even triple an index like the standard and poors five hundred. I would recommend that investors avoid these very risky funds.