July 12, 2011

An insight into Share market- part 3


In your attempt in knowing about the share market in the sites I have mentioned in my previous posts, you would have come across the term "Mutual Funds". So what is it? What do the Funds do? How do they play a significant role in increasing your money value?
We'l see all about Mutual Funds in this post.

Imagine there is someone willing to help you out in identifying the right shares you need to buy/sell at the right time in order to meet your needs. That is what Mutual Funds do. In the broader view, you select a Mutual Fund and give them the money that you kept aside for investing in shares and they do the rest. You will have only 2 tasks:

1) Pay them (regularly in SIP basis I would recommend)
2) Either sit back comfortably or keep tracking the performance of your fund :) I would suggest the latter. C'mon you are dealing with money.

There are innumerable funds out there. Before selecting the fund, you need to make sure of your target. It could be a short term, long term, Mid term etc. Once you are done with your Requirements Gathering(Oops! Thats a S/W Engineering term) set off to search for the fund you are looking for. Dont worry. Internet has made it a piece of cake with all the information categorized accordingly.

Steps to assist you:

  • Goto www.moneycontrol.com site and select the Mutual funds tab
  • Best Funds to buy, Top rated funds ets are the links you have to check out.
  • Watch for the returns each fund yield for a particular period
As I said, It is a piece of cake!

In top rated funds  For eg: check HDFC Equity Fund (G). In stock market you buy in terms of shares whereas in Mutual Funds you buy in terms of units. One unit of HDFC Equity Fund today costs Rs.281.21. Each fund has its own minimum investment criteria. If Rs.1000 is the minimum investment in HDFC Equity Fund in SIP(Systematic Investment Plan) basis, you can start investing Rs.1000 every month thus acquiring around 3 units each time.You have all the freedom to withdraw the investment any time you want and you will be given the returns accumulated till that time.


Click on the Portfolio tab in the HDFC Equity Fund(G) page. All funds try their best to be alive and become the most popular ones among the rest. In order to achieve this, they always stay on the side of profit making companies. Meaning, they analyze the stock market every second and buy and sell accordingly. As you saw, HDFC Equity Fund(G) has invested majorly in SBI, ICICI, TCS, Infosys, Bank Of Baroda, Coal India, Bharti Airtel, Reliance, Tata Motors and Cipla. If the fund suspects that any of these shares will go down in the next few days, the fund will sell that particular share.

Visit www.valueresearchonline.com to know more about the fund performance. I'l continue writing about it in my next post.

Happy investing!
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