Equity Funds

Equity funds are the most popular funds amongst the investors only because of one big reason : IT IS HIGHLY PROFITABLE.

HOW it is HIGHLY PROFITABLE?

Equity funds are directly linked with the performance of the stock market. Investments are made in different scrips of the market and there performance and dividend payment outs determine the performance of the funds. When stock markets go up the profit generated is high.

STOCK MARKET v/s EQUITY MUTUAL FUNDS

 If you have already tried your luck in the stock market and not succeeded you should try equity based mutual funds. Why? this is because when you are investing directly in the stock market ,depending on the capital you have, you can only play with few scrips in your hand. The probability of losses are high if the market goes down and your scrips prices goes down . When you invest in equity based mutual funds you have two great benefits.  

Number 1: No matter how much capital you have, you get exposure of several scrips which diversify your risk and helps you generating better returns. 

Number 2: You do not need to worry . As the nature of the mutual fund company all the funds invested through a mutual fund companies are managed by professional fund mangers who posses the expertise and experience of trading, backed with good research by the dedicated research department which guides the fund manager to take decisions which in future generate better profits then you could have got from investing in stock market directly.

TIPS OF INVESTMENT in Equity Funds for FREE

Equity funds are directly related to the stock market and the performance of the fund dependents on the stock market performance. Following tips if followed can help you generate higher returns over the period of time:

1. Patience is virtue: The key of making good returns from the equity funds is patience . You should invest for at least a year to get good returns.
2. Never Book Loss: If the market is going down never disinvest wait for the right time . Markets do go down and they do come up.
3. Invest at the right time: People tend to invest when the market is going up or have already reached a point after which profit taking starts hence making loss. Invest when the markets are down so that you can disinvest when the markets are up and generate a good profit.
4. Invest with good Asset Management Company:  Before investing in a mutual fund you should always look into where there funds are invested, the industries they have invested in , the scrips and the companies they trust . You could find this information on there monthly fund mangers report and websites.
5. Disinvest at the Right time: Your invested money will never be doubled. It might only happen in very few rare cases and if it have happened to you then you are one lucky person. You should set up a target or expectation before investing. When that target is meet disinvest. Normally for Pakistan and Karachi Stock Exchange the profit you should expect is something between  30% to 45%.
6. Manage your Investment :  As tempting the returns are for the investor, you should always reconsider your risk appetite. Diversify your investment in different funds , never take full exposure of Equity fund if you are investing your hard earned savings. Only invest a portion of it so in case market goes down you could bear the loss.
7. Subscribe for Daily NAV s and Monthly Fund Managers Report: The NAV or the Net asset value of the fund is announced daily subscribe for that so you could measure your own performance. Monthly fund managers reports gives a over view of the who month went and profit generated over the month.
8. Last but not the least INVEST WISELY .