If you are a first timer on the field of stocks and you had been advised by a well wisher, not to invest in stocks as it could be a risky proposition. Instead you had been told to go in for mutual funds. What would you do?

Your dilemma doesn’t end here.

You need to make up your mind as how should you go about your mutual funds plan.

What are the best funds available in the market?

Should you go for equity based investments or should you prefer a safer option? Will your money be safe in a particular fund?

These are some of the queries you need to find answers of, before you park your hard earned money in one of the funds.

Here are few tips that would help you decide, to invest your money in a proper and more reliable fund.

* Being a first timer, you need to consult those who had already been investing their money in funds. It gives you a clear idea as how should you approach your investments. Which funds to choose and which ones to leave. Hire a consultant as he would be the best person to guide you.

* If you couldn’t avail the services of a consultant due to some reason, then opt for balanced funds. What are balanced funds? Balanced funds are those funds that invest in equity as well as in debts. Since the debt share in a balanced fund is considerable higher, the chances of you losing your money are negligible. You definitely get lower returns comparatively to equity funds, but it’s safer than equity funds.

* If you are a salaried professional, then the best option available for you is ELSS funds. The best part about these funds

a) Is a very low investment option.

b) You get the advantages of an equity fund

ELSS is a diversified equity fund with tax benefits. The only disadvantage that you have is a three year locking period, but if you have enough in your coffers and you do not mind keeping your money locked for three years, then ELSS is probably the best investment plan for a beginner.

* If you are someone who likes taking limited risks, then index funds is the right investment option for you. You may choose a less risky index funds, which would give you higher returns in comparison to balanced or ELSS funds.

* Finally, if your risk appetite is higher then opt for diversified equity funds. The greater the risk, greater the profit. Returns from a diversified equity funds is predominantly higher than any other funds. You may earn a lot if your funds have a good day in the stock market. Still, beginners are advised to stay away from equity funds, and keep themselves involved with a low risk investment option.

Never allow excitement to get better of you. Take advices and do what you heart say. Be clever and try to learn the tricks of the trade.

If you do follow these steps, you perhaps would become a better player of funds in the future.

Author Bio: http://www.financemagazineonline.com/2009/06/what-are-best-mutual-funds-to-invest-in.html

Category: Finances
Keywords: mutual funds, to invest, best mutual funds