Stock Market And Mutual Funds

Stock Market

A stock exchange is a financial market where buy and sell transactions of securities takes place. These buy and sell prices are determined by market forces like demand and supply. A stock exchange helps investors to trade through a convenient and secured platform. The Bombay Stock Exchange (BSE) is the oldest stock exchange in India. Currently, the National Stock Exchange (NSE) is the leading stock exchange of the country and is located in Mumbai.
You can buy and sell securities like shares, debentures, bonds, etc. through a stock exchange. It requires registration by the Central Government. Trading securities is governed by rules and regulations of the stock exchange and SEBI (Securities and Exchange Board of India) guidelines. SEBI is the regulator for the securities market in India.

Buying shares in mutual funds can be intimidating for beginning investors. There is a huge amount of funds available, all with different investment strategies and asset groups. Trading shares in mutual funds is different than trading shares in stocks or exchange-traded funds (ETFs). The fees charged for mutual funds can be complicated. Understanding these fees is important since they have a large impact on the performance of investments in a fund. The following is a guide to help get a new investor up to speed on the basics of trading mutual funds.

What Are Mutual Funds?

A mutual fund is an investment company that takes money from many investors and pools it together in one large pot. The professional manager for the fund invests the money in different types of assets including stocks, bonds, commodities and even real estate. An investor buys shares in the mutual fund. These shares represent an ownership interest in a portion of the assets owned by the fund. Mutual funds are designed for longer-term investors and are not meant to be traded frequently due to their fee structures.

Mutual funds are often attractive to investors because they are widely diversified. Diversification helps to minimize risk to an investment. Rather than having to research and make an individual decision as to each type of asset to include in a portfolio, mutual funds offer a single comprehensive investment vehicle. Some mutual funds can have thousands of different holdings. Mutual funds are also very liquid. It is easy to buy and redeem shares in mutual funds.