Earning enough money to lead a comfortable life is important to all of us. Unfortunately, the standard of living is continuously increasing, and it is becoming more and more difficult for people to keep up with their earlier standard of living on the same salary that they have been getting for a few years. Many people are trying to earn some extra money on the side, but they are weary of investments. The Harshad Mehta scam shocked small investors, and the common man is still scarred by what happened in 1992. Today however, India has several private mutual funds which people can easily invest in for good returns.
Indians have always been taught to save their money. Even as children, we were always told to save our pocket money as far as possible for the rainy day we never truly saw. However, the concept of saving has stood strong in our minds, and most Indians keep away a large portion of their earnings as savings. While savings are great, they don’t really help increase our income. We earn very little interest on these savings when we keep them in a bank, and these small rates of interest don’t really help us when we want to buy a car or a house.
Investing the money that we save is an easy way to earn a little bit extra, without actually doing too much of leg work. Mutual funds are one of the best ways to invest our money, as they are fairly safe investments. The money for a mutual investment is pooled together from a number of small investors, and then put in a number of bonds and securities. In this way, even if one bond or security doesn’t do too well in the market, the money invested in the other bonds and securities can still make profits. There are a number of different types of mutual funds available to us, and it is up to us to choose where to invest our money. There are equity large-cap funds, equity mid-cap funds, equity multi-cap funds, hybrid funds, and systematic investment plans available to us. We can pick and choose where we want to put our money, based on the kind of returns we are looking at.
A company like ICICI Prudential Banking and Financial Services has one of the best mutual funds that we can invest in. Companies like Reliance Media and Entertainment and SBI Magnum Sector Funds Umbrella are also good investments to make. Over the years, the entire process of investing in a mutual fund has become standardised, and companies have to give their investors periodic updates. Once you invest in a mutual fund company of your choice, you should get an annual report about how your investment is doing. Based on these reports, you can decide whether you want to continue on with your investment, or take your investment out of the market. However, before making any decisions, it is important to remember that the market changes from month to month and from year to year, even if you investment has not done too well in one year, wait it out, as the next year it may perform better. We can prove this by looking at the mutual fund market from 2011 to 2013. While it did not do too well in 2011-2012, the mutual fund market took giant steps in the upward direction in the year 2012-2013.