Ground Rules of Mutual-Fund Investing

Mutual Funds are increasingly being touted as the retail investors' investment vehicle. But to add to your confusion investing in them not as easy with the wide variety available today. To top it 26 new funds were launched in 2000 alone till now. But the good news is that it gives you choice and the benefit of growing competition – service and endeavor to perform. Besides, greater transparency and disclosure is driving greater fund accountability to their shareholders, i.e. you and has also made a relatively safer marketplace. The key challenge is to choose the right fund. But its simple. It only requires a bit of discipline and little time – hardly a cost for a secure financial future. Following are some rules to help invest better and attain your financial goals. Know Yourself: The first step towards achieving your goals is that you must know yourself. Try to get an idea of how much risk you can handle. Do a tolerance test for yourself. If your Rs. 10000 investment turning into Rs. 6,000 upsets you--even if it could subsequently bounce back--perhaps an aggressive equity fund is not for you. Reality Chec

This article was originally published on June 19, 2001.