A newbie seeking guidance for Mutual Fund investments

This is not the right time to get rid of hard earned money as the situation is concerned across the country and the economy is in peril. The best advise is to hold your plans for another two months by that time the situation would be fully understood and we will get the market feed on which mutual fund can be invested. But I already have mutual fund with L&T which is good and reliable and even in the lock down period they have credited my interest and that proves my decision was good which I invested two years back. However instead of seeking advise on this matter better to have self assessment on every mutual fund be closely watched for their performance and the risk factor. The construction Industry is going to start the work from 21st of April and this gives the high hope that the mutual funds concerning to construction Industries may be considered.

Mutual funds can offer you benefits in the long terms. Hence it should not be the goal of the investor to garner huge profit within a short interval.
In terms of financial investments, the time ahead seems to risky since the growth rate of economy will remain depressed for at least a couple of months and our impression that equity shares would move sharply with the initial incubation period. Such an assumption may not hold good because of varying factors chiefly being low demand of the particular equity and the maket is in the stage of recovery.
However, you may look for investment in such mutual funds investing large funds either in the pharma sectors or in the construction secors.
My assumption is that in both the sectors there would be a significant surge of such funds within a couple months after the initial bearish phase. You may take up the help of the noted financial consultant in this regard.

Mutual fund is the most popular way of investing money. Many rich people and people having surplus resources do it. Even the middle class people do it by buying mutual fund units on a monthly basis as they do not have money for that at one go. Before we think of investing in this area let us first understand what are mutual funds and where they put our money to earn returns and then give us a dividend or good return on our capital after a stipulated time. Mutual funds take money from us and then they invest it in share market, bonds, commercial papers or documents, debt instruments and avenues like that. Mutual funds would be investing in a dynamic way. Once they find that some share is likely to go down, they would sell it and buy some other which is more beneficial for the fund. This dynamic action of mutual fund ultimately earns some money and then at the year end or in between disburse the profit to its members. It looks so simple to invest in the mutual fund and earn money. But there is a hidden threat. What happens when the market nosedives? Then the net asset value (NAV) of mutual fund units goes down significantly and if one sells his holdings at such times then loss would be there. So, essence of this discussion is to understand that the mutual funds have some inherent risk and the investor should know it in advance.

The entities in which the mutual funds invest are basically of two types. One is stocks or shares and other is bonds and debt instruments. Shares fluctuate much and provide more or less profit as well as loss while bonds would provide a low return but it would be steady and would not fluctuate much. It is now clear that the equity oriented mutual funds might give more return but they are a riskier option while bonds oriented mutual funds might give less return but they are less riskier. To cope up this differentiation some mutual funds have floated balanced fund in which about 60% is invested in shares and about 40% is invested in bonds. This gives advantage of the both the worlds. Many people opt for balanced fund schemes. Further, one good method to invest in mutual fund is to invest through SIP mode which is a systematic way of investing every month for some time and this smoothens the price fluctuation in the market over a long period. Many people go for SIP mode of investing. It reduces the risk to some extent.

One important thing in this investment option is that a lot of patience and risk taking capacity is required in mutual fund investing as it is not like the simple bank FD deposits or Post Office NSc / KVP etc. The share market behaves in a bizarre fashion and no one can predict its movement though there are many methods invented by the financial wizards in this respect. Let us take a practical example as on today. Due to the virus threat the market is in a subdued shape and we do not know which way it would move. At this point speculation is attempted by people and those who think that within 2-3 months everything would be all right would go for buy at this juncture to make good profits after 2-3 months. But those who are pessimistic and think that this threatening phase would continue for next 6 months or more might make investment at a later time. So share market is dependent on many factors and accordingly the fate of mutual funds because they buy the shares and bonds with their corpus. Bonds practically give a fixed type of return only so main contributing factor for mutual fund growth is share prices.

Generally, share market or mutual fund investments are supposed to be a long time investment strategy though some shrewd investors would try to make money at every high in the market but timing that accurately is not everybody's cup of tea. I would recommend to invest some money in some balanced funds and some money in only equity oriented funds of some good fund houses and depending upon the availability of investible funds one can buy them at one go or go for SIP mode.

Investing money in mutual funds is an indirect way of investing in the share market. The money invested by us in mutual funds will be used by the fund manager and invest in other areas where chances of getting profits are there. As an individual, one may not have knowledge of the market and how best we can invest. But if we put it in Mutual funds, there will be some people in the institution who knows about the market and they make wise decisions and generally it is very rare we may lose by investing in Mutual Funds.
We can invest small amounts monthly in these funds and we can also invest higher amounts once. Systematic Investment Plans (SIPs) are very famous these days. Before investing in any mutual fund one should study how that MF company is doing, who is the person at the helm of the affairs and what is his track record and what are the recent returns recorded. It is better if we consult a person who is good in financial matters and invest as per his suggestion.

There is no such predefined category that is suitable for newbies to Mutual funds. You will have to analyse before investing in any particular fund. You need not to worry if you face loss in the starting, because then only you will learn. In the initial stage of investing, everyone makes loss whether its mutual fund or stock market.
Actually, each mutual fund scheme of a company is focussed towards predefined set of companies in which fixed percentage is invested by the fund manager. In the present scenario, you will notice much ups and downs in the market. And also, market is quite low in comparion to what it was 2-3 months ago. So, it is a good time to invest. Since, you are a newbie, I would not suggest you to invest too much your hard earned money into it. Just invest a little amount whatever you can afford (say 1000 INR or 5000 INR) and watch your portfolio.
Now, there are two ways in which you can invest. First is SIP i.e. Systematic Investment Plan and other is Lumpsum. In SIP, investor invests a fixed amount on a particular date of every month for a certain period of time (say 1 year). While in lumpsum, investor directly invests a big amount in one go. Since, you are newbie so you must go with SIP.
Regarding investment in mutual fund, I would suggest you to invest in that scheme in which the fund manager had invested in big companies of India. Or the companies which are strong enough and can stand in this economic crisis amid COVID-19 outbreak.

Mutual Fund is a set of money where the investors put according to their contribution. All the collective amount is then invested according to the objective of the fund. The money can be invested in bonds, stocks, golds and other assets. The funds are managed either by fund managers or money managers. Some of the categories of mutual funds are Equity, debt, money market and Hybrid funds. Equity funds are invested only in stocks and equity instruments. The debt funds are invested in fixed income instruments. Money market funds are invested in short term funds and Hybrid funds are funds which are invested between equity and debt to maintain a balance.
Before investing in mutual funds, it is better to have an idea on how your risk can be managed by investing tax savings funds. One of the best advantages of investing in a mutual fund is that each investor will be getting access to professional money management fund managers. For an investor creating individual portfolios will be difficult, so taking the help of fund manager is a good option.

Your question says that "I have no market knowledge".
Mutual Funds(MFs)are precisely for those who do not have market knowledge, but who want to invest as beginners.
In MFs the investor is not directly investing in the market but has access to the benefit of investing in the market through a medium of MF. The MF s have market experts who plan, act, and respond to the various situations arising in the market. However, as the risk is dealt with and responded by the MF, the return or loss is not as good or bad as an indirect investment.

Being a beginner you should start investing in small amounts in established and reputed Mutual Funds.
While the past performance record is not a guarantee for future performance, you can get a basic idea by going through the various Funds the Fund organization is handling. As you have already Googled on the matter, you can still search for more details with suitable keywords.

MFs investing in equity give more return, but carry more risk also. Funds investing in Debts are less risky but may not give a good return.

So you can pick funds where the investments are balanced in both. Similarly, you may also invest both in dividend-paying and growth ( dividend reinvesting).
Mutual funds may give good returns in the long run. Hence you should first decide how long you can spare your money. Similarly, you have to decide how much you can spare money now which you may not need now and can take the risk on.
Visit the websites of the Funds, financial newspapers, magazines, etc and do some homework o shortlist the Fund Houses and Funds you want to invest. You should also consider the charges deducted by them and any special clauses added in the fine print.
If you need to provide or tax exemption, then you can invest in Tax exempted fund -ELSS funds.

Today the share market has come down significantly and accordingly the mutual funds are also down the reason is that mutual funds buy shares and some other liquid assets from their corpus and once the market goes down everything related to it also sinks. At the same time for investors it is an opportunity as one can invest some amount to take advantage of the fact that if everything becomes normal in due course of time then the market would go upward and the investment made today would also be very rewarding. So, many people are investing in market today from that perspective. Just 2 days ago RBI has also announced a financial package for the sinking mutual funds which is also a good sign that Govt is keen to support this financial market and once the present crisis is over we can definitely expect good returns from the investments made today in the mutual funds. Only caution is that mutual funds and share market is a risk area and one should put a limited amount in that. I would quote the well known saying here that - do not keep all your eggs in the same basket.

In mutual fund there is investment option available base on your risk taking ability and term of investments.
Basically there is Two types of option available 1. Equity Mutual Fund 2. Debt Mutual Fund

If you want to take risk and opportunity of higher return then you have to go for equity mutual funds and for lower risk and lower return you have to go for debt mutual fund.

In Equity Oriented mutual fund i suggest balance advantage category of mutual fund for low risk and better return in todays scenario.

In Debt oriented fund I will suggest Banking & PSU bank bond funds for better return in todays scenario.