How to start investing in Mutual Funds

POSTED BY tarunaggarwal.saphr@gmail.com ON February 14, 2011 11:50 am COMMENTS (4)

Dear All,

I am new member of this forum and new to investing also. I want to start a SIP in mutual funds. Can you please tell me how to start like

1) how to purchase the mutual funds online? Do i need a demat account and tranding account for this?

2) Which Mutual funds should i invest? (keeping 3+ years in mind)

3) Charges involved in purchasing them and selling them?

4) Suppose i choose mutual fund “A”, then do i have to select the categories and sectors also (like equity, debst etc and Infrastrucutre, banking etc).

As of now I am having very limited knowledge in all this. So, would highly appreciate if you could help me with these questions.

 

Tarun

 

4 replies on this article “How to start investing in Mutual Funds”

  1. Parag Patel says:
    July 2, 2011 at 3:01 pm

    Hi Tarun, being a newbie in investing you have selected the right choice to invest in SIPs.
    SIP is a very effective method of mutual funds investment and has several advantages. First, tax-saving SIPs offers certain income tax benefits, which can help reduce the tax burden. Second, since you have to make payments periodically, you don’t need to have a large sum of money available at one time. Third, it gets you into the discipline of investing by necessitating periodic payments. And finally, SIPs spread your investments over a long time and protect you from the daily volatility/fluctuations in the market.

    Reply
  2. bharat shah says:
    February 18, 2011 at 12:58 pm

    in addition , i like to suggest you to limit your total mutual funds to 4-7 for long time , decide your asset allocation,predetermine your rebalancing asset strategy and reshuffling mutual fund strategy from the start.

    Reply
  3. Tarun Aggarwal says:
    February 15, 2011 at 11:23 am

    Hi Rajesh,
    Thanks a lot your your detailed reply.
    Regarding my first question, I have read a lot about fundsindia.com. So, i am going with that as i understand that there is no charges to transact from this site. Now, the next part is looking for a good mutual fund, for which i will go through the link provided by you.

    Thanks for your prompt reply.

    Tarun

    Reply
  4. Rajesh says:
    February 14, 2011 at 12:03 pm

    Hi Tarun
    The best place to start learning is a school – and for mutual funds, there are many schools that you can chose from. Try this link for a start http://bit.ly/gw4kmU

    Answers to your questions:
    1. You can purchase mutual funds online directly through AMC websites, through online portals, through stock brokers and also through Independent Advisors using online platforms.
    You do not need a demat and a trading account for only dealing with mutual funds. And hence, you are saved of those costs.
    2. You may look at this list to figure out what funds you would want to pick for your investments – http://t.co/U8N56vR
    3. Many online portals help you transact free of charge. Do read through the terms and conditions of stock brokers/trading platforms to understand their rate cards to service an investor like you.
    4. Yes, you will need to look at different categories and sectors. But for a start, define your objective. In 3+ years, what do you want to do with your money? The first link I have given you in my answer should give you more tools and calculators to help you understand more.
    Feel free to ask any further questions…

    Happy informed investing.

    Reply

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