Invest in mutual funds to benefit from beaten down markets

The year gone by has been a forgettable one for the stock markets, starting with a bang and ending with a whimper, leaving investor in a jittery state of mind and great sense of uncertainty. But the next couple of years (2009-10) can unfold an altogether different script. Experts are suggesting that the market is quite close to its bottom. They are advising current investors to stay invested and the new ones to enter it.

However, stock picking is not an easy process for an individual owing to the lack of ability to study technical and other fundamental aspects of the listed companies. So, the best option is to leave it to experts. In case of stock markets, fund managers are your most trusted resource and guide for benefiting from the great window of opportunity in form of the beaten down markets.

Investing can have different connotations and implications for different individuals based on their profile – emotional, economical and social – which largely determines each one’s style of investing, which can either be high risk, medium risk or absolutely conservative based on a safety first approach.

Irrespective of the approach to investing and the mindset, everyone wants to multiply one’s wealth to beat inflation and sustain one’s lifestyle.

The cardinal rule of creating wealth is staying focused; invest regularly and sticking be disciplined in your investing pattern despite of the market cycles. Mutual funds (MF) plans help you cultivate that discipline. Simply explained, amutual fund pools money from many individual and institutional investors to make up a large pool of capial that is selectively invested in stocks, bonds and other securities, depending on the nature of the scheme. An investor is issued units in proportion to the amount of money invested.

There are different schemes – existing and new ones – each with its own set of benefits that we will grasp gradually.