Is it right time to invest in mutual fund if so which one has good potential?

There is no such thing as the right time. The person above has the right answer about dollar cost averaging. Invest a set amount every month and when the market is down, you will be able to buy more shares, resulting in a better return in the long run. Start off with an index fund like Vanguard S&P 500. You will have instant diversity, which is the most important thing in investing. Index funds beat most others over the long run. Later on, put another 20% in fixed income, like bonds. Vanguard Total Bond Market is another. Or go to Fidelity. They have the same type of funds too.

Watch the market and make your choice.

Looks like you have missed the bus! still you may catch the passenger train if the bull run persists and the stock market goes up. If you choose a good MF your returns may range from 8-15% . Not like the 30% they gave a year or two ago.

With mutual funds, your best bet is to do dollar cost averaging.

Invest the minimum, then every month buy a bit more.

It is always the right time to invest in a few "good" mutual funds and/or ETFs, you need some diversification. To find out which ones have good potential, go to morningstar.com, look at mutual funds (managers buy and sell the stocks within their stated category, industry or country) and ETF's, (exchange traded funds = companies in the stated category, industry or country) you can look at the one with the best track record, best rankings by morningstar, etc... for the bull market we've been in since 2003, I like China (ie FHKCX, FXI) South East Asia (ie FSEAX) and Latin America (ie FLATX) and the fundamentals for these haven't changed yet.

it is always adviced that new investors invest in mutual fundsthrough systematic investment plans. so ur not affected by the ups and downs of the market.

Every time is a good time for Mutual Fund Investments. If you are in India, you may select Reliance Diversified Power Sector Growth Fund. It is growing at the rate of 80% per year.

1) Yes.
2) If you let me know how long do you want to invest then I will help you.