1. For a new investor, equity mutual funds offer a range of options catering to various needs and goals depending on your risk profile.
2. You could "test waters" in 5-star rated funds by initiating long-term SIPs of equal amounts of your investible surplus in a smallcap (7 years), a midcap (10 years), and a multicap (15 years) fund.
3. For investing in equities by entering the stock market, you should check if you're fit to be a stock investor, with the right attitude to be a willing learner during its volatility, as stock buying, holding and selling on your own can be a tricky business and is not meant for everyone.
4. How much you'll earn from your investments in the stock market will depend on the time and effort you put into your research because there's no such thing as a safe stock or a guaranteed multibagger.
5. In this regard, you should gain adequate knowledge about various sectors and be able to evaluate business aspects like operating margins, product mix, management quality, cash flow visibility, etc. of your identified companies before including them in your portfolio - a job which fund managers otherwise aim to do for you when you invest in equity funds.
6. You can reduce investment risk in the stock market to an extent by:-
a) Spreading your investments across stable blue-chip companies and evergreen sectors,
b) Understanding the difference between "price" and "value" of a stock,
c) Staying invested for the long term by "not timing the market" but "spending time in the market",
d) Monitoring your investments on a half-yearly basis for rebalancing the portfolio so that it remains at your comfortable level of risk, and
e) Recognizing that equity investing is a high-risk, high-return activity, based on several assumptions that can go awry, hence it will never give uniform risk-free returns on an yearly basis.
7. You could even invest regularly in the stock market through ETFs to get indexed annual returns.
2. You could "test waters" in 5-star rated funds by initiating long-term SIPs of equal amounts of your investible surplus in a smallcap (7 years), a midcap (10 years), and a multicap (15 years) fund.
3. For investing in equities by entering the stock market, you should check if you're fit to be a stock investor, with the right attitude to be a willing learner during its volatility, as stock buying, holding and selling on your own can be a tricky business and is not meant for everyone.
4. How much you'll earn from your investments in the stock market will depend on the time and effort you put into your research because there's no such thing as a safe stock or a guaranteed multibagger.
5. In this regard, you should gain adequate knowledge about various sectors and be able to evaluate business aspects like operating margins, product mix, management quality, cash flow visibility, etc. of your identified companies before including them in your portfolio - a job which fund managers otherwise aim to do for you when you invest in equity funds.
6. You can reduce investment risk in the stock market to an extent by:-
a) Spreading your investments across stable blue-chip companies and evergreen sectors,
b) Understanding the difference between "price" and "value" of a stock,
c) Staying invested for the long term by "not timing the market" but "spending time in the market",
d) Monitoring your investments on a half-yearly basis for rebalancing the portfolio so that it remains at your comfortable level of risk, and
e) Recognizing that equity investing is a high-risk, high-return activity, based on several assumptions that can go awry, hence it will never give uniform risk-free returns on an yearly basis.
7. You could even invest regularly in the stock market through ETFs to get indexed annual returns.