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Archive for the ‘Mutual Fund Questions’ Category

I have basically two sets of questions:

1)
Everybody talks about investing money in Mutual Funds. Suppose, you want to invest some money in Mutual Funds (CLOSE ENDED for 3 years say) (say in HDFC Tax saving Mutual Fund).

- How you will be paid your return after 3 years ?

- Does the Mutual Fund company AUTOMATICALLY send your profit (if any) by check to your home address ?

- who pays the return (profit) ? I am confused, how one will get the return (profit) ?

2)

Now suppose, you want to invest some money in another Mutual Fund (OPEN ENDED i.e you can withdraw money at any time…right ?) . Now, say you want to discontinue after 3 Months.

- what do you have to do ? I have read that you have to “sell the Mutual Fund” ….but selling to whom ? how do I get the customer to sell?

- is it necessary to sell ?

- if I dont sell but want to withdraw what will happen ?

very much confused.

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I also have other questions…..

Which is better way to invest?

(1) with dividend or without dividend ?
(2) close ended or open ended ?

I have also read a fact , that suppose you invest some money in a mutual fund company. But is the mutual fund company is doing badly and the fund is constantly dropping in value….that means, you are not getting any profit…right ? your money is gone….correct ?

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I’m a 23 year old recently graduated from college and got a job. I want to start saving up and while the money is not being used for anything, I though I might as well put it to work. I am thinking of investing in mutual funds. Can someone tell me what is a good mutual fund to put my money in? Or, should I invest in something else such as stocks or bonds? Any adivce would be appreciated.

I keep reading on Morningstar and other finance websites about how “such and such mutual funds are getting too bloated with assets,” and that this is especially a problem for funds that focus on small-cap stocks. And I see that Vanguard and many other companies have closed funds to new investors–even Vanguard’s Windsor II, which focuses on huge corporations, has restricted new investors. Let’s say a mutual fund purchases more that 50% of a company, why is that bad? Isn’t that what Warren Buffet’s Berkshire Hathaway does?