by Sanjeev Kumar Gopalakrishnan, Investing
03 Oct , 2017

Starting Mutual Fund investments

How do I invest in mutual funds? When and in which funds do I invest? We have been receiving lot of such queries lately. Mutual funds seem to be quite the buzzword now in the financial sector.  Let’s take a look at what mutual funds are.

Mutual funds are collective investment schemes. They collect money from investors and invest in shares, bonds, bank deposits and gold. They are regulated by the government body, SEBI (Securities and Exchange Board of India). There are strict rules which mutual funds have to follow and hence the chance of fraud is very low. Usually equity mutual funds invest in 50 to 60 company stocks. There will be a fund manager for a scheme and he has analysts who monitor the performance of the companies and do lot of research on them. Based on the research data, they change the stocks. A person who buys individual stocks will not be able to do that much research. By investing through equity mutual funds you can eliminate the risk associated with investing in one company.

You can get to know about good equity mutual funds from the research reports of stock brokers, sites like moneycontrol.com or from magazines like Manorama Sampadyam. There are several ways in which one can invest in mutual funds. One can invest online or offline or in direct as well as regular plans. In order to invest in mutual funds, you need a PAN, bank account as well as be KYC (Know your client) compliant.  

One way to invest is to approach a stock broker or a bank. They will do your KYC registration and fill the forms. You will have to give a photo, address proof, id proof, PAN card copy, cancelled bank cheque and sign the required forms. Alternatively you can go directly to the office of the particular mutual fund company and they will help you invest in their schemes. If you are internet savvy, you can invest online also. If you buy directly from the mutual funds company, then you can save some cost as direct schemes do not carry cost of commission paid to agents. Click here to know more about direct mutual funds.

Building an investment portfolio with mutual funds and other investment avenues based on your goal requirements is easy when you have a Strong financial guidance.


 About The Author

Sanjeev Kumar G, an IBS Chennai Alumni, is a Certified Financial Planner (CFP) from India, since 2005. He has 22 years of experience and is an expert in various personal finance areas like portfolio construction, investment research, life insurance and financial planning.

 

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