Mutual fund Investment Vs Direct stock market investment

In the present volatile market, First time investors should be very cautious where to invest and how they chose the investment.In the lure to make quick buck in the stock market by  investing in penny stocks by hearing few analysts you might end up losing your hard earned money.So for beginners or people who are just started investing Mutual funds are the better option and in the long run they multiply your money.

                                Stock market returns are generally positive over the long run.Below is the sample graph of Nifty index for the past 15 years.You see the graph which shows the Nifty in upward trajectory.But in the short run the market is volatile.So you need to invest in a staggered manner if you want to invest directly in stock market.

Nifty Past 15 years growth graph

Mutual funds are also very good investments if you are not able to invest directly in stock market.

For investing in stock market you need to know the stock market basics,When to buy and when to sell and also why you want to buy the stock.So before buying you need to ask lot of question to your like why do you want to buy this stock,It should not be a random decision like some one suggested you or some one else bought it.

                                                    

                                                    Mutual fund investments should be started at your young age itslef.The power of compounding is so good that when you start early you will reap the benefits of it see the below example to understand it better.

Though the difference in both the investments is just 5000 rupees.It made a lot of difference to the overall Final amount.

One very important thing for any investor is Never Borrow and invest.If you had to pick one mutual fund that will grow over next 10 years you can pick  an Index fund.

Example:Reliance index fund Nifty plan(Growth option).See the NAV of the Fund for the past 4 years.

If the Nifty increases this fund nav increases.So if you invest in this particular fund without investing in individual nifty companies you can enjoy the superior returns.One thing is that india is a 2 Trillion dollar economy now and it will easily become 4 trillion dollar economy in the next 10 years.So the consumption of the People will also increase, Automatically the Earnings of the companies increases and so the Nifty also increases in the long run.

                                                 One very important thing to remember before investing is never invest by taking an advice from anyone even me.I started investing in mutual funds 5 years back and now i have got good returns from them but you should have patience.And you should not stop investing when the stock market is up or down.Never look into the Nifty just keep on investing and you will earn profit in the long run.Never invest for short term whether it is stock market or in Mutual funds these are tools to earn wealth in the long run.

Happy investing :) My next blog will be on how to find out the right stock .. coming soon.