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Stock Market and You

LESSON  3:

Mutual Funds (MFs):  If you are new to the stock market and have no knowledge about it, invest in an equity index scheme of an MF.  Here, the NAV –Net Asset Value – follows the underlying index.  There are many other schemes – hundreds of them – with new schemes still being floated.  If you listen to your broker, there is every chance of his recommending  that  scheme  which fetches him the most commission,  irrespective of the performance of the scheme.  So, before investing your hard earned money,  think twice.  And never ask the broker for advice.  It’s  like going to the barber and asking   him whether you need a hair cut!         

Whether you are a tax payer or not,  opening a  PPF deposit is  an excellent idea. Because ,  as  your income  increases, sooner or later you’ll come under the tax bracket.  Here,  the  interest is compounded on annual basis.    Since the interest earned on your PPF is tax free,  interest yield is high.

Learn how to safely invest in the stock market in the next Lesson. 


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