Tuesday, December 20, 2011

How To Invest In Share Market ?

With online Demat Account you can buy and sell quickly and cheaply and in more or less any amount you want. So how do you get involved? You can invest directly, buying and selling shares in individual companies such as Reliance and ONGC. If you have the time, and lots of discipline, this can be best way to go. Many people feel more comfortable getting a fund manager to do the investing for them. You can get funds that invest in particular markets such as the BSE,NSE India. You can also get funds that invest in certain types of industries, such as biotech or mining. You can get even funds that just invest in smaller companies. As a rule, you pay up to 5% as an initial fee when you invest and around 1.5% each year to the people who manage these funds. There is a cheaper alternative - you can invest in funds where the decisions about where and when to invest are made automatically according to a strict set of guidelines and not by an overpaid fund manager! Typically, these sorts of funds, called index trackers, will cost you nothing in initial charges and around 0.5% a year. Over the course of, say, twenty years these lower charges mean you end up keeping a lot more of your money. Lower charges mean index trackers perform better than most other funds (often called managed funds). Indeed, over a period of five years, an index tracker is likely to beat 75% to 80% of other funds. Over longer period, it's likely to do even better.