Indian financial system is a well organized structure for finance in India. Mutual funds are one of the investment options available to investors and most preferred investment technique adopted by Indian investors. The reason being the risk associated with it is lesser as compare to other investment options.
There are some tips for investors, with these tips he can invest smartly in it. First of all investor has to understand that there are two types of risk certain and uncertain risk. Certain risk is a type of risk which can be controlled by properly managing the portfolio of shares where as mutual fund cannot do this for uncertain risk. Therefore an investor should always study the present market and predict the future market and invest in such a way that there should be negative correlation between the shares chosen, so that when value of one share increases with the market and due to any other reason value of other share decreases then there should be a balance and loss could be minimized.
An investor should always keep in his mind that Mutual Fund Investment is not hundred percent risks free but is insulated from market risk and risk is minimized. Investor should always keep an eye on the fee and associated costs as incorporated by mutual fund investment companies. Because many a times it happens there are many hidden costs which companies take by making fool of their customers. The shares which perform consistently well and those shares which are new and doing average performance should be bought first. And later if investor's budget allows him then he can take a chance with average going shares but those one which are old and have grip in the stock market. Hence by adopting these techniques an investor can have an efficient portfolio of shares. And will help you in many other ways. Thus makes you a smart investor. And brings you profits.
