Is now good time invest in mutual fund?

Index is at 12500, record high. So my thought is if I buy mutual fund now fund will be invested in stock market when market is record high and then over time it will lose value.

Depends on your time horizon. Its at a record (dow today 12666) but whose to say these record highs won't continue. If you don't invest today, in 2 years if the dowt is at 12,900+, you will be kicking yourself. But it very well could be lower. Remember the dot com bubble? The dow is higher that it was then during its peak in eary March 2000 just before it fell, but if you invest in a S&P 500 index fund or a NASDAQ index, you would have lost 7 years later. Then S&P was at 1527.46, now around 1440, NASDAQ then at 5132, now around 2465. So maybe if you have a 10 year or so time horizon, you could start with the minimum amount the fund allows ($50 with T. Rowe Price) and dollar cost average once a month. But, if you have 30+ years or so before you need the money, there has never been (except maybe {I havent looked it up} during 1902 to the depths of the depression in 1932, but now there are safeguards to prevent such a thing again) a 30+ yearperiod where you would have lost money, so it will pay to invest all now and use compounding and time in the market to make you nest egg.

Obviously buying low and selling high is a terrific idea--if you have a crystal ball that tells when those times have come. For the rest of us, there are two guidlines: people who are randomly out of the market don't do as well as those who stay continuously in it. And the best way to deal with ups and down is to invest an identical amount on a pre-decided regular basis (like monthly). This is called dollar cost averaging. By doing this, you will be buying more shares when the price is low and fewer when it is high.

There's one small exception to this: usually near the end of the year (the fund will tell you if you ask), the fund goes "ex-dividend", which means it pays out dividends and capital gains and lowers the fund price accordingly. If you buy just before that, you will pay tax on shares you owned only briefly.

Otherwise, on the average you're better off not trying to time the market and you're better off starting as soon as possible.

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