Your Questions About Investing In Mutual Funds

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Paul asks…

What do I need to know about investing in mutual funds?

Threw $3,000 into a mutal fund with my bank but I started thinking about complicated this might actually be. What do I need to know about investing like this? And how much harder is it going to be for me when it comes time to file my taxes?
I know so little about this subject that I am unable to choose a best answer. Please vote appropriately.

financi4 answers:

It only costs you if the bank charges you a fee, and you SELL some of the funds. Then, you’d pay capital gains on the profit.

Robert asks…

Is demat account is necessary for investing in mutual funds?

is mutual funds also need a share brokers to invest?

financi4 answers:

No, Demat account is not at all necessary to invest in mutual funds.
Also, it does not need a share broker.

Whatever mutual fund you want to invest in – get a print of it’s form (you can find that on net).
Fill it, and deposit in the nearest respective branch.

You’ll receive the kit in few days.
I invested in mutual funds just 2 months back – and I do not own a demat account.

Charles asks…

Is it possible to make money quickly by investing in mutual funds?

Is there any other safe way to make money quickly by investing. The amount should be enough to purchase a flat for example.

financi4 answers:

There is no safe way to make money…the base rule is that returns are directly proportional to risks…in other words higher risks means higher returns…but that doesn’t mean that u will get returns for sure in you take big risks..big risk taking means there are chances of big losses as well…mutual fund is for those who cant understand equity market much …the underlying logic is not to put all the eggs is one basket…directly investing in equities can give higher returns than mutual funds but it is also more riskier than mutual funds unless you understand the stock market….if you are interested in long term investment then invest in equities which will give you best returns across all asset classes in long term..if you are young and capable of taking some risks you can also start your own business..however if you want to make money from investments equity is the best option but only if you are a long term investor..and if you can take risks you can make huge sums there also…nobody can time the market to perfection..but if you have the guts to go against the market then probably you can make very good returns but that requires a lot of patience as you will be buying when others will be selling and you will have to wait for some time for next bull run to happen

Richard asks…

Why is investing in Mutual Funds bad?

i heard I should not invest in mutual funds, but invest in Stocks and Bonds only

why is this? why are mutual funds bad? thank you. i’m 24 and starting to invest into my 401k and am contributing a very high % to my retirement plan and want to make sure i only invest in the right asset mix…60% company stock and 40% bonds is good? thanks for your help.
also, are there fees you have to pay to invest in a mutual fund or something? why is this? thanks.

financi4 answers:

I am an affiliate financial planner, I hope this helps

Why is investing in Mutual Funds bad?
> Because for some people it is too risky, and for some people its returns are too low.

I heard I should not invest in mutual funds, but invest in Stocks and Bonds only.
> Based only on your age (not yet 30), yes (corporate bonds and stocks), for addition you might want to consider your risk profile, since the risk of investing in stocks is higher than that of mutual funds.

Want to make sure i only invest in the right asset mix…60% company stock and 40% bonds is good?
> There are lots of kinds of asset mix. Like if you invest in mutual funds and stocks, you want to avoid mutual funds that invests mainly on stocks.

Are there fees you have to pay to invest in a mutual fund or something? Why is this?
> Yes, there are fees. The fund managers need money too.

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