Investment in Equity is always considered to be complex. The reason being, lack of knowledge and/or fear of loosing hard earned money due to market volatality.

You really need to have time, knowledge and money to invest and make profits in Stock markets.

Though we agree with the above statement, we feel you can make profits and become rich with good investment strategy.

After the SEBI banned mutual funds from charging entry load which is used by MFs to pay commissions to their distributors/agents, investing in Mutual Funds became more attractive.

So, how do we pick the mutual funds from the lot?

It’s simple, just analyze the returns given by various fund categories over the past say 5 years.

History says that FMCG, Banking and Pharma sectors were always on top.

Often, top analysts advice investors to buy equity diversified fund but the above mentioned categories always topped and gave much more returns than equity diversified funds.

We believe it’s better to diversify by putting our money equally in the above sectors we mentioned.

It’s also relatively safe to invest in good equity diversified mutual funds such as HDFC Equity, HDFC Top 200, Reliance Growth through Systematic Investment Plan (SIP).

These funds have been in market from very long and has shown consistent performance. There may be funds which are doing very good currently but can you trust them for long term investment such as for retirement?

Disclaimer: Please consult a investment expert before making any decisions as they suggest you based on your risk appetite, tenure you wanted to stay invested etc.

This is very critical for every investor and this asset allocation should have broad categories of stocks, bonds - both corporate and government etc. This process is not so easy and has to be derived based on investment objectives and needs, risk taking capability and time horizon. This portfolio should be rebalanced as and when there is a signification change in the value of your assets in your kitty.

No body on this earth can determine the low or high of stock market or for that matter any market. However, we will know that market is at peak or low comparatively. So when it’s at peak, invest less and book profits at the earliest. And when the markets are low, invest more systematically and allow it grow. And after it reaches its target, reduce your exposure by selling some stocks and invest your profits in safer instruments.

Just like you and I can have a portfolio, mutual funds also have a pre determined portfolio. Though some AMCs display portfolio and fund allocation details, some don’t.