How to distribute your mutual fund investments?

Can I have some help on how to distribute my investments in the mutual funds .I have decided based on my requirements to invest in Balance funds , growth schemes and open ended schemes.The no.of funds in the market makes it difficult to select .What are the methods to be used in identifiying the right fund.

What are growth 'schemes' and open-ended 'schemes'? Growth funds and open-ended funds?

Almost all funds that invest in equities (stocks) are open-ended, by the way.

Anyway, check morningstar.com. They are _the_ mutual fund rating authority. Look for 4 or 5 stars. Learn how a fund earns more stars, and you might even start down-selecting funds within a group of all 5-star funds. A fund has to be solid all-around to get 5 stars, but some might have unusually low fees, or might perform much better than most funds in a down market, etc.

You can get a fair amoutn of nfor for free from morningstar, or you can pay for a subscription (small price to pay if you're using it as the primary source of info for your investments), and get more info and much better searching an analysis.

In general, you want to balance your investments (soiunds like you are, but go beyind just big and small companies). You should have a combo of both domestic and international (overweight international right now), small, medium, and large companies (overweight larger companies), and if you have enough to really specialize, you might want to pick classes of funds that will be resistant to a potential drop in the market due to the mortgage crunch. (consumer staples, for instance.)

i will definitely take advice from banks

First go for the dividend history of the scheme you are going to select. If the scheme has given dividend regularly in all ups and downs of market, you can prefer such funds. Buy some NFO's, study the history of other schemes of that fund.

Mutual Fund investments are riskier as compared to other traditional investment vehicles. In india there are approximately 45-50 Mutual Fund houses and thousands schemes.

To invest in mutual fund, you should decide the best asset alocation and on the bases of your risk tolerance level the schemes should be selected. The more aggresive the scheme, the more risk and the much the better returns.

So without proper demographic and your income details your financial advisor should not suggest you any mutual fund.

I am a Mutual Fund advisor since last 3 years and i never suggest my clients any fund which is not suitable to him. Sometimes s fund that is not suitable for my client may suit her spouse. It happens in real life because everyone has different risk tolerance level and risk taking capacity.

You should not invest in any fund just because your neighbour said he earned some 35% to 40% in some scheme last year.

So you should describe your goals and other details to your financial advisor and on the basis of that you should invest in mutual funds.

go to a mutual fund distributor and take expert help.

You should go to valueresearchonline.com for expert guidance on mutual fund investing. It is very useful and informative.

Do you mean to "distribute" them to your friends or to select them before buying? Using the right words makes it easier for people to understand what you mean.

valueresearchonline.com or monecontrol.com are the best sites.

Diversify your investment to 4-5 funds based on * rating of the funds. Always go for old funds. Dont go for NFOs.

Hello Shunu W,

The best way to start is to read as much as possible about security markets in general and mutual funds specifically. Mutual funds can be very good investments if you do the necessarily mutual fund research to find the best mutual funds for you. As the editor of a mutual fund newsletter focused on US based no load mutual funds, some of the factors that I look at are historical mutual fund performance, expenses, consistency and especially the quality of management. I am very selective when it comes to mutual fund manager and analyst backgrounds and experience. You do not necessarily have to pay any more for a highly qualified mutual fund manager, so why not select mutual fund managers with the best credentials.

As far as reading is concerned, I highly recommend a research report on the http://www.tweedybrown.com website called 鈥淲hat Has Worked in Investing鈥?that shows how different asset classes have performed over time. I also highly recommend The Intelligent Investor by Benjamin Graham. Mr. Graham is considered to be the father of value investing and one of his students was Warren Buffett. These sources are educational in nature and timeless.

There are a variety of free mutual fund resources you could use such as Morningstar.com and Yahoo.com. There are also many subscription-based services that provide model portfolios, recommendations and other mutual fund information. You might also be interested in taking a look at http://www.Investopedia.com , which is also a very good source of educational mutual fund information.

I hope this helps.

Michael A. Weiss, CFA
The Editor
The Mutual Fund Investor
http://www.mutualfundinvestor.net