Religare PSU Equity Fund - Wanna Invest?

Will you invest in Religare PSU Equity Fund?

Well, that is the question Moneycontrol.com is asking to its readers on there Mutual Funds page. I personally do not have the answer to that question, but lets see what the investors have to say on this subject. Before that why not take a look at the fund itself.

Religare PSU Equity Fund is an open ended equity scheme which will invest in equity and equity related instruments in the PSU sector. Mr. Pradeep Kumar will be the Fund Manager and this equity scheme is now available in the market. The issue opened on the 29th September 2009 and will close on the 28th October 2009. Entry Load for this scheme is zero however your agent may charge you separately for his service.

I just now checked the results of the poll on the moneycontrol.com website and I found that 58% voters have voted against this fund saying no. I do not understand as to why so many people are against this fund. I personally feel that investing in the PSU sector for a very long term will definitely result in profits. Those who wants to invest for a short period of time may choose a different fund. The PSU sector is well diversified in all business such as telecom, steel, metals, engineering, etc.

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Why should you invest in Mutual Funds?

Lets ask ourselves a question. Why should we invest our hard earned money in Mutual Funds? Why not directly into the Stock Markets by buying Shares? Well, to answer this question I would say that investing directly into the equity markets is a bit risky. You need to understand how the stock markets run. What affects the markets and how it reacts to certain news and reports by the media and the government. You need to know when to get in to a company and when to get out. Some people just get in to a stock and forgets to get out in a timely manner. Traders must know the get in and get out's of trading. On the other hand if you come to the stock market as an investor, then you got to have a very good knowledge of the company your are going to invest. Investing can be done for short term and long term. People have different goals in life. And for that purpose they come and invest.

Traders on the other hand do not come to the stock markets to invest for a very long term. They are very short term investors who look for opportunities to get in and get out quickly and make fast bucks. The game is very simple. Buy at a low price and sell at a high price. And you just made some bucks as profit. However, trading is always risky as the time frame of your investment is too short. Only the professional and experienced traders makes a lot of profit without having too many losses. New comers always get a big loss at some point of time. That is why you need to invest your money somewhere safe but market linked.

Investing in Mutual Funds can bring you a smile on your face. Unlike stocks, in mutual funds you do not buy shares directly. You invest your money into a Fund. Every Fund has a Fund Manager, who manages the activity of that Fund. A group of professionally skilled workers work under the Fund Managers. You get an yearly dividend from the fund.

Always Invest in a Diversified Equity Mutual Fund.

Why invest in a new mutual fund? A new mutual fund has no history. Nobody knows whether the fund will be able to give the returns it promised. Why risk your hard earned money on a new fund rather than investing in a fund which has a proven track record. Many old mutual fund schemes have a vast performance data. Analyzing this data many analyst have given advice on their websites about the best performing mutual funds.

So, how should we select a fund from the ocean of so many mutual funds? And the answer is that we need to do a small research on the internet. Some of the online web sites that give information about mutual funds are Value Research Online, Mutual Funds India, Easy MF, and many more to come. Just type any company name on a search engine and you will get their home page link instantly. Visit the site and search for equity diversified mutual funds. Check their one year past performance. Most of the websites display the top three or top five best performing funds on every sector. You have to select the category according to your needs.

Finally, when you have selected and read about the funds, you may want to invest on some of these mutual funds. Now a days, you have the option of investing online over the internet by paying through your banks website. Be sure to pay through a trusted website rather than fall prey to any fraud websites stealing you personal information, etc. ICICI Securities Limited offers investing online via their website ICICI Direct. For this you need to have a Demat A/c with them. You can invest a lump sum amount at one go or you also have the option to invest systematically through SIP. SIP stands for Systematic Investment Plan.

If you are not comfortable investing online over the internet then you are always welcome to do it in the old fashioned way. Just visit any bank and ask for an investment advisor. Every bank has got one. They can also provide you with a financial planner and a portfolio manager. Not only that, now you can also invest in mutual funds from your local post office.

Investing directly into stocks is always a risky business. It is always wise to play safe in an unsafe market. Although mutual funds never promise guaranteed returns from the stock markets. However, these investments prove to do much better than other investment instruments.