6. Are mutual funds for shares only?
Well do you have only Diwali sales? Just like sales for every season, there are funds for many reasons. If you want to invest in gold, there is a gold fund. If you want to invest in bonds (instrument that pays interest and returns your principal on maturity) there are bond funds. If you want to invest in bonds and shares, there are balanced funds. If you want to invest in shares of other countries, there are international funds.
7. If Sensex falls, then what do I do?
Don’t do anything. The value of your investment depends on the value of the bonds, shares etc where your fund manager has invested the money.
8. How do I know which is a good fund for me?
How do you decide which school is good for your child? You look for a good reputation and good teaching method. Apply same criterion for funds too: chose a fund with a proven track record and a good fund manager.
9. How do I know which is the best fund or the one with a good track record?
To understand more about list of funds and how it works, visit Association of Mutual Funds in India. Spend more time on mutual funds dedicated websites such as valueresearchonline.com (I got my first salary from them) or Morningstar.in to compare all kinds of funds.
10. How do I invest in a mutual fund?
You have choices here too. Go through a middleman like an agent, bank manager or you can invest on your own. Get papers in places, figure out where to deposit them. Once you have invested, you don’t need to visit the fund office unless there is any change in name address etc. You can withdraw or invest more if the fund has online facility.
So go on and ask more stupid questions about mutual funds to your spouse, adviser and even this Gruhini because being stupid today will make you an informed investor tomorrow!
