The Skinny on Mutual Fund Investing

Mutual fund investing is a lot like Thai cooking. Everyone has heard of it, most know a little something about it, but very few actually know how to do it and do it well. To invest in mutual funds wisely, it is important to have a good grasp on what mutual funds are, how they work, and what the risks involved may be. The fact that mutual fund investments are often considered safer than stocks, options, and other investments often misleads people to think that their investment in mutual funds are risk free. This, as you will see, is not the case.

The Risks of Mutual Fund Investing

First of all, mutual fund investments are not insured by the FDIC or any other federal insurance program or government agency. Even in cases where mutual funds are purchased through a bank (some may even bear the name of the bank), it is possible to lose money when mutual fund investing. Also mutual fund investments come with costs and fees that can affect the amount of return you receive on a mutual fund investment. It is important to know the costs of mutual fund investing before buying the funds. The Securities and Exchange Commission offers an online mutual fund investment cost calculator at its website which allows potential mutual fund investors to investigate the costs associated with the mutual fund they are interested in.

What is a Mutual Fund Anyway?

A mutual fund is actually a company that operates by taking money from a group of investors (all those that buy the fund) and then invests it in stocks or bonds, short term money market instruments, securities, options, or some combination of these investments. If the investments pay off, the investors make money. Because most mutual funds are run by people with a certain amount of financial savvy and stock market experience, mutual fund investing is often considered rather safe, but the potential for loss is real and must be considered.

Mutual fund investing can be advantageous because there are a number of federal regulations in place that are designed to protect investors. The actual investments that the fund makes are watched closely by market analysts and financial managers whose job it is to make appropriate decisions regarding the mutual fund's investments. The downsides include costs, taxes, and fees which must be paid regardless of how the fund performs.

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In The News:

Why picking the right mutual fund is key in a tough market  LivemintWhy have mutual fund (MF) returns fallen? Mutual funds primarily invest in equity (stocks) or debt (bonds). On the equity side, mid and small cap MFs have given ...
Top 25 equity mutual funds failed to deliver positive returns in June  Economic TimesNEW DELHI: Top 25 mutual fund schemes, managing retail money in excess of $1 billion (Rs 7,000 crore) each, failed to deliver positive returns in June.
MF shopping list: Top 30 stocks that fund managers bought & sold in June  MoneycontrolMutual funds increased allocation to private banks, consumer, utilities, technology, NBFCs, retail, metals and PSU bank stocks in June, an ICICIdirect report said.
A mutual fund for daughter’s education  Economic TimesIf you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.
What India's three largest mutual funds bought and sold in June  LivemintInflows into Indian equity mutual funds jumped the most in three months in June.India's top money manager HDFC Mutual Fund held $22 billion in equities.
Mutual funds’ exposure to this space at all-time high; should you buy?  Economic TimesMoney managers on Dalal Street continued to shower affection on private banks for the ninth successive month as their exposure hit 19.90 per cent in June, ...
Stocks pricey, mid- & small-cap funds prefer to hold more cash  Economic TimesCash holding of mid-cap and small-cap funds has increased significantly following stretched valuations of these companies and the regulatory rejig of the fund ...
Fund managers raise stake in 19 cos which rose 10-50% in 2019; do you own any?  MoneycontrolFund managers were also quick to spot companies which have plunged in double digits up to 60 percent so far in 2019. There are more than 30 companies in ...
Kunj Bansal : Pioneer fund manager debunks some investing myths  MoneycontrolWith nearly 25 years of experience in investing Kunj Bansal has been in the mutual fund industry when it was in its nascent state. Learning and working with the ...
Flipkart co-founder Sachin Bansal may foray into mutual fund business  Economic TimesSachin Bansal, former co-Founder of Flipkart, is mulling a foray into the mutual fund space, according to a report by ETNow. The business news channel said ...
MF Wrap: Banking is the top pick for fund houses in June; here are other sectors that made it to their shopping list  MoneycontrolAsset managers continued to gather shares of banks for the ninth straight month in June, according to Securities and Exchange Board of India (SEBI) ...
Stability, fundamental strength guide mutual funds’ stock picks in June  Economic TimesFor fund managers committing money in June, the guiding principle was mere survival through stable returns. Given the uncertainty in demand and few signs of ...
Mutual Fund tips and tricks: What is Index Fund? How to invest?  Zee BusinessWe all are familiar with mutual fund investment which can be done with several options, including index funds. Just like large cap or mid cap funds, index fund is ...
Equity mutual fund inflows hit seven month high in June despite volatile stock market; key things to know  The Financial ExpressThe equity mutual inflows touched a *fresh* seven-month high in June despite heightened volatility in the stock market.
IL&FS crisis impact: Mutual fund holdings in CPs slump 25%  Economic TimesMutual fund holdings in commercial paper have declined 25 per cent since August 2018. The exposure in commercial paper stood at Rs 3.72 lakh crore as of ...
MF portfolio doctor: Babji needs to exit direct investments in stocks, take mutual funds route  Economic TimesThe Portfolio Doctor assesses the health of the fund portfolio, examines the schemes and their suitability with regard to the goals.
Stability, fundamental strength guide MFs’ stock picks in June  Economic TimesFor fund managers committing money in June, the guiding principle was mere survival through stable returns. Given the uncertainty in demand and few signs of ...
When to Choose Between Mutual Funds vs. Stocks  U.S. News & World ReportUnlike stocks, mutual funds offer built-in diversification and combine buckets of money for people to invest in stocks and bonds and are often recommended by ...
BlackRock and Vanguard are the biggest investors in private prisons  CNNVanguard and iShares owner BlackRock are the two largest holders of prison companes CoreCivic and GEO. State Street Global Advisers, Prudential's QMA ...
Growth Stocks: 3 Key Traits This Wells Fargo Mutual Fund Seeks In Winners  Investor's Business DailyGrowth stocks need robust and sustainable earnings growth for Wells Fargo's Thomas Ognar to buy them. And their growth must be underappreciated.
MFs up play in banks, NBFCs & capital goods  Economic TimesAs the economy enters a high growth phase, fund managers are gobbling up non-banking finance stocks along with capital goods and banks as they expect ...
Best Core Stock Mutual Funds  Morningstar.comSee top-rated, low-cost funds that could round out the domestic stock portion of your portfolio. Start a 14-day free trial to Morningstar Premium to unlock our ...
Danger Lurks for Stock Managers Chained to Crowded Trades  BloombergIt's an old saw of professional money management that nobody gets fired for buying IBM. But in 2019, the perils of groupthink may be creating their own kind of ...
Mutual funds’ midcap bets rising cautiously; smallcaps still a no-no  Economic TimesNifty Midcap 100 has shed 16% since February 2018 while Nifty Smallcap100 tanked 30%.
Why ace investor Porinju Veliyath is holding on to a few underperforming stocks  The News MinuteHaving experienced the vagaries of markets for the past three decades, Porinju sees a significant recovery going forward though he cannot give a timeframe for ...
Local mutual funds’ global bets disappoint on returns charts  Economic TimesInternational schemes of domestic mutual funds mostly held stocks of global companies that have been underperformers. Cognizant, Alphabet, Facebook and ...
'We’ll only launch funds in categories we would invest our own money in'  LivemintPPFAS Mutual Fund CFO Rajeev Thakkar talks about the fund house's investing philosophy and why garnering assets under management (AUM) is not its ...
Sensex nosedives over 500 points as auto stocks drag; Nifty below 11,450  Times of IndiaIndia Business News: Equity indices cracked on Friday with the benchmark BSE sensex plunging more than 500 points as auto and financial stocks witnessed ...
Mutual funds wrap: Based on benefits — Can CPSE ETFs be game changer towards low risk ELSS funds?  MoneycontrolIn the last one year, the CPSE ETF has delivered a return of 11.69 percent, while in the last three years, the scheme delivered 9.19 percent.
Kotak Mutual Fund launches Kotak Focused Equity Fund  Economic TimesKotak Asset Management Company has launched Kotak Focused Equity Fund, an open-ended scheme that will invest in a focused portfolio of up to 30 stocks ...
Fidelity Steps Up Vanguard Fee War With Low-Cost Index Funds  BloombergFidelity Investments is stepping up its rivalry with Vanguard Group by launching five new index mutual funds with expense ratios it says are lower than the ...
Best Mutual Funds: Microsoft, Facebook, 29 More Stocks Receive Over $100 Million Each  Investor's Business DailyIn the latest list of new buys by the best mutual funds, Microsoft, Facebook, Starbucks, and Costco each received over $100 million in new investments.
Best Mutual Funds: This Baron Fund Seeks Unique Stocks  Investor's Business DailyAlex Umansky does not focus on macro market questions. Instead, he focuses on finding stocks that make his portfolio one of the best mutual funds.
4 Best-Performing High-Yield Mutual Funds in 2019 So Far  NasdaqWhile investors rejoice the Dow's feat to breach the 27000 level and the S&P 500 recently breezing past 3000, market pundits have some good.
Why long-term equity investors should not invest in PSU stocks  Economic TimesLong-term equity investors have earned decent returns over the past 10 years. The Sensex rose from 14,765 to 39,592 during the past decade, generating an ...
Sensex rises 157 points; metal, power stocks rally  Economic TimesThe index hit an intra-day high of 39674.22 and a low of 39319.64.
Only NBFC fix can remove mutual fund risk; Sebi whip alone won’t do  Economic TimesCapital markets regulator Sebi's attempt to improve prudential regulation that includes tighter investment rules for debt mutual funds and stricter disclosure for ...
What are the mixed signals from stock market telling investors?  Economic TimesHere are six signs emanating from the market that investors should take note of.
Best large- and mid-cap schemes to invest for three years?  Economic TimesIf you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.
ITR filing charges: Know charges for filing Income Tax Return  MoneycontrolFiling ITR is the most essential duty of a citizen. Click here to know the charges for filing income tax return at Moneycontrol.
Debt-laden DHFL gets Sebi approval to exit mutual fund business  Economic TimesDebt-laden Dewan Housing Finance Corporation (DHFL) on Wednesday said it has received the Securities and Exchange Board of India's (Sebi) approval to ...
Best Mutual Funds: This MainStay Fund Bets On 3 Types Of Growth Stocks  Investor's Business DailyMainStay Large Cap Growth Fund is one of the best mutual funds. Its managers know where they like to look for growth stocks — and where not to bother.
AMFI classification: These 6 stocks can move to largecaps; what should you do?  MoneycontrolMidcaps are in a better position to deliver strong returns in the long run. Hence, investors can look at a portfolio of quality mid and largecaps, experts said.
Sebi says MF-promoter pacts do not hold, tightens rules to protect debt fund investors  Economic TimesNEW DELHI/Mumbai: Sebi Chairman Ajay Tyagi on Thursday said the market watchdog does not recognise standstill agreements between promoters and ...
A diversified mutual fund portfolio for a moderate investor  Economic TimesI am a beginner in mutual funds. I want your review on my portfolio. I have invested in these two funds: 1. Mirae Asset Emerging Bluechip Fund (SIP of Rs 1,000)
Some pockets in mid, small caps have turned attractive, S Naren of ICICI Pru Mutual Fund  Economic TimesWe spoke to to S Naren, ED & CIO, ICICI Prudential Mutual Fund, to find out what is in store for mutual fund investors.
Reliance Home Finance extends Rs 400 cr NCD; Rel MF schemes hit  Economic TimesMumbai: Reliance Home Finance, an Anil Ambani company, has refinanced non-convertible debentures (NCDs) worth Rs 400 crore that had matured on Friday, ...
6 ways to beat the stock market — from a money manager who’s been doing it for years  MarketWatchDonald Trump makes a lot of questionable comments, but the president is right about one thing: Everybody thinks they're a great investor in a market hitting new ...
Top 10 stocks to buy if market revives post full Union Budget  Economic TimesEquity investors on Dalal Street are waiting for the full Union Budget to see if it contains what is needed to revive the domestic equity market and put it on a rising ...
4 Top Technology Mutual Funds for Solid Returns  NasdaqRisk lovers seeking healthy returns over a fairly long investment horizon may opt for technology mutual funds. It is believed that the technology.
How to Buy European Stocks: A Guide for 2019 • Benzinga  BenzingaLearn how to buy European stocks, whether you're a US based or non-US based investor, with this step-by-step guide for beginners.
Insurance stocks rally 2-7% on strong APE growth in June  MoneycontrolLife insurance stocks gained 2-7 percent intraday on July 12 after private companies reported healthy growth in annual premium equivalent (APE) in June.
'Smart money is moving towards value small & midcaps; invest in these stocks ahead of Budget 2019'  MoneycontrolApart from banking space, smart money is also moving into mid and small caps. But, here the money is tracking attractive valuations and not visibility, V K ...
Stocks close flat on mutual fund sell-off  DAWN.comKARACHI: Stock market presented a picture of volatility all through the day with the KSE-100 index closing with a minor gain of 13.67 points (0.04 per cent) at ...
Sebi tightens disclosure norms on pledged shares, approves DVR framework for tech startups  Economic TimesMumbai: The Securities and Exchange Board of India (Sebi) on Thursday tightened disclosure norms for promoter share pledges, imposed royalty payment rules ...
Morgan Stanley beats profit estimates as rising stocks benefit wealth management and fund divisions  CNBCMorgan Stanley on Thursday beat analysts' estimates for second-quarter profit as a buoyant stock market helped two of the investment bank's three main ...
'Taking credit risks in liquid funds not the right thing to do': BoI AXA  MoneycontrolCredit events usually happen when the economy does not do well. We are not out of the problem fully. More trouble cannot be ruled out, though most of it is ...
Picking stocks, like picking ballplayers, can get complicated  The Washington PostPicking baseball players is not that different from picking stocks. Let's take pitcher Max Scherzer. If the $210 million star were a stock, he might be global ...
Invest in trolling time for multibagger returns; GHCL, Uflex among top 4 buy ideas  MoneycontrolStocks having strong fundamentals with improved and unique business outlook should be looked upon particularly.
SBI mutual fund and SBI Caps take divergent stance on 'risky' Emami stock  MoneylifeIn a clear case of one hand not knowing what the other is doing, the mutual fund arm of country's largest bank SBI has remained heavily invested in the ...
Sustainable fund? Index fund? More investors choose both  The Philadelphia TribuneNEW YORK — Two of the hottest trends in investing are working in tandem to steer billions of dollars toward companies seen as the best corporate citizens.
7 Things to Know About Index Funds vs. Mutual Funds  U.S. News & World ReportBoth index funds and active mutual funds are a good addition to a portfolio.
Budget 2019 could be a populist one; Nifty unlikely to breakout soon  MoneycontrolBudget 2019 being Nirmala Sitharaman's first in a stable majority government, we expect it to be a populist one. The centre of focus could be on the micro ...
Here are the mutual fund favourites in April  MoneycontrolMaximum month-on-month change in value was seen in TCS, ICICI Bank and Kotak Mahindra Bank.
Investing Insights: Russ Kinnel's Favorite Funds  Morningstar.comEditor's note: We are presenting Morningstar's Investing Insights podcast here. You can subscribe for free on iTunes. ***. Christine Benz: Hi, I'm Christine Benz ...
Is your mutual fund buying or selling stocks too much?  LivemintWhen a fund manager buys and sells far too often, there is a problem.A turnover ratio measures the extent to which a fund manager churns her portfolio.
Big tech companies help U.S. T. Rowe Price stock funds beat S&P 500  Baltimore Business JournalT. Rowe Price saw 14 of its U.S. stock mutual funds outperform the S&P 500. Are you invested in any of them?
Is Fidelity Advisor Technology A (FADTX) a Strong Mutual Fund Pick Right Now?  NasdaqAny investors hoping to find a Sector - Tech fund might consider looking past Fidelity Advisor Technology A (FADTX). FADTX holds a Zacks Mutual Fund.
What India's top three mutual funds bought and sold in March  Economic TimesIndias largest money manager held 1.5 trillion rupees in equities.
Consider investing in direct stocks only if you can monitor portfolio proactively  LivemintDirect stocks can be considered if you have the ability to do research to identify the stocks to be bought as well as to be sold.You should be revisiting your ...
Should you invest in international mutual funds?  LivemintIf you were to sort all equity mutual funds available for retail investment by their one-year performance, international funds would come on top. The best ...
Govt increases limit to disclose investment in stocks, mutual funds for employees  Moneycontrol.com*Service* rules say no government servant shall speculate in any stock, share or other investment.
What India's top three mutual funds bought and sold in May  LivemintInflows into Indian equity mutual funds in May rebounded from the smallest in 31 months as Prime Minister Narendra Modi's comfortable electoral win spurred ...
A young investor’s guide to mutual funds  Economic TimesMany young investors, who are barely a year or two old in their career, are eager to start investing in mutual funds. ETMutualFunds.com receive many queries on ...
What top mutual funds bought and sold last month  LivemintMumbai: Inflows into Indian equity mutual funds in January were the smallest in two years as heightened market volatility and political uncertainty cooled ...
Sensex's rise from 20K to 40K: 5 lessons for equity mutual fund investors  Economic TimesWe look at some critical lessons that equity fund investors learnt during the journey of Sensex reaching 40K.
Index mutual funds see 60% jump in assets in a year as actively managed funds struggle  Economic TimesIndex mutual funds — a category that aims to mimic returns of benchmarks, like Nifty or Sensex — have seen their assets surge 60% over the past one year as ...
Here are a few mutual funds that stocked up on YES Bank in Q4FY19  Business StandardShares of YES Bank tanked 30 per cent in trade on Tuesday, after the bank reported a massive Rs 1,507 crore loss in the fourth quarter of financial year 2018-19 ...
MF holdings of auto stocks at record low: Motilal Oswal study  BusinessLineMutual funds' holdings of auto sector stocks stood at a record low in April, finds a study by broking house Motilal Oswal Securities. The weightage of the auto ...
How concentrated is your mutual fund portfolio?  LivemintA concentrated portfolio can backfire badly if the fund manager's strategy goes wrong.A portfolio with few stocks can fall sharply if share prices of most stocks in ...
Stick to MFs if you lack knowledge on stocks  LivemintWhile equity is surely the way going forward considering your age and the financial goals, how you buy in equity is important.Direct stocks work very well if done ...
Mutual funds shooting themselves in the foot?  Economic TimesWhat if banks take a leaf out of Kotak and HDFC Mutual Funds' decision to direct investors to come another day to get their money instead of paying them on the ...
Flows into mutual funds revive in May as Modi win seems to spur risk demand  LivemintFlows into Indian equity mutual funds in May rebounded from the smallest in 31 months as Prime Minister Narendra Modi's comfortable electoral win spurred ...
Here's a look at the mutual fund favourites in May  MoneycontrolThe second month of FY19-20 saw a notable change in the sector and stock allocation from the top 20 mutual fund houses. On a month-on-month basis, MFs ...
Mutual funds bet big on these 30 stocks in November; do you own any?  Moneycontrol.comThe Indian equity market rose about 5 percent in November but what was more heartening to see was inflows into mutual funds. Investors pumped Rs 1.4 lakh ...
Actively-managed large cap mutual funds poised for a comeback  Economic TimesDefying predictions of their imminent irrelevance, some actively-managed large cap mutual fund schemes have bounced back to the top of the return chart.
ITR filing: Income tax department makes disclosing LTCG from stocks, equity mutual funds simpler  LivemintThe Finance Bill 2018 reintroduced tax on LTCG made from listed shares and equity-oriented mutual fund.You only need to disclose the total LTCG from ...
Mutual funds or direct equity investment – which is better?  Economic TimesOne big question that often dogs investors is which investing option should they opt for: mutual fund or direct equity? Katalyst Wealth's Ekansh Mittal ends your ...
Should you invest in algorithm-based quant mutual funds?  Economic TimesQuant funds work on a data-driven model that relies on a mix of parameters and algorithms to identify the right stocks at the right time. But can they beat actively ...
7 stocks most favoured by mutual funds over last one year  Economic TimesAs the markets hit a speed bump, stocks favoured by mutual funds appear to be safer bets.
First-time investors can look at these mutual funds for long term  Economic TimesInvestors, who were waiting on the sidelines for the uncertainty to recede, are now looking to deploy their cash. But, valuations remain steep.
Stop! Too many stocks, mutual funds are not good for you; Buying too many may not get you more  The Financial ExpressHandling the overall risk of investments is crucial, but not at the cost of not meeting your financial goals. Over-diversification can do this.
Mutual funds sell several blue chips stocks, buy mid-caps in March  Business StandardDomestic money managers were seen pruning their holdings in several blue-chip stocks, including Reliance Industries (RIL) and Housing Development Finance ...
Investment limits Sebi prescribes for mutual funds  LivemintIn case of unrated debt instruments, a mutual fund cannot invest more than 10% of the portfolio in a single issuer and 25% in all such securities.In case of listed ...
How income from stocks and mutual funds are taxed for an individual  Moneycontrol.comCapital gains from transfer of unlisted share are considered as STCG where period of holding is less than or equal to 24 months, and LTCG when holding period ...
The dangers of high mutual fund inflows  LivemintMutual funds have put ₹2.4 trillion into markets in the last two years.Equity mutual funds receive ₹8000 crore monthly through SIPs.
What top 5 money managers bought and sold in February  Economic TimesFebruary was the fourth consecutive month of decline in net investment into equity mutual funds.
I want to invest Rs 1 crore in stocks and mutual funds for 5 years. How should I invest?  Economic TimesYou may consider the following asset allocation: 40% in large-caps; 40% in large and mid-cap, or multi-caps; and remaining 20% in mid- and small-cap funds.
Best mutual funds to invest in 2019  Economic TimesWhich are the best mutual funds to invest? Most investors have this query before they start investing in mutual funds. Curiously, it is the first question most ...
Will these mutual funds help me to create Rs 8 crore?  Economic TimesIf you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

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