Hello Chandan Singh,
I would say that your prediction towards Mutual Funds are not right, They are the safest category in the investments of the individual in the share market.
I would suggest you to search some banks and financial institutions that are doing well in the market. Then you just need to invest in those sectors that are doing well I would suggest you to have your investment distributed in various sections and try to invest in some four or five companies if you feel you are taking risk by investing in a single market.
What Does Mutual Funds Mean
Mutual funds are the part of the shares. Many individuals cannot afford to buy shares in the stock market for a lump sum amount of minimum of 5000 rs. Thereby the Mutual funds companies have broken the shares of say 5000 rupees into various shares of 10 or 50 each that makes it comfortable to buy for the investors.
How Mutual Fund works.
I would say that the mutual fund companies appoint some specialists who can study the market for the company in the stock market, They study both the fundamental and Technical study to know well about the company where they have to invest and they often go to Blue Chips company shares that does not loose it place in the market. These are the companies which never faces any losses, the experts divide the money they got from the public and invest them in various companies that are best ranked in the share market and earn the profit which are divided among the various investors and the company that deals with mutual funds.
The companies are divided in the category like AAA+, AAA-, AA, BB etc., based on the rankings too some of the companies go to buy the shares, and you have got nothing to do other than enjoy the profits from your mutual funds investment every activity will be carried out by the company where you have bought your mutual funds.
Alternatives : Investment on Bonds
If you want more security and reduction in the tax on salary, It would be better to invest in Bonds as these bonds are issued by the government to build the infrastructural facilities of the country and after a period of 5 or more years when the bond gets matured, We can return the bond back it back to the government and get the amount invested on them with an interest.
"The greatest achievement comes from the biggest challenges"