mutual funds
Investing is a quite a complex exercise. But when it comes to the basic principles, they are amazingly simple. Anyone can become good investor and reach your goals just by following those simple and easy rules. Here is the list of few rules for making investment in mutual funds:

Be a long-term investor:
You should have a long term horizon. Short-term trading will make brokers rich and not investors and the income tax department will also be happy. Mutual funds are diversified and therefore, their gains and losses are likely to be lower than what it would be in case you are investing in an individual security. However, major fluctuations are highly uncommon in mutual funds. So what make sense is to leave your capital in a mutual fund for a long time and let it compound. So the key point is Buy and Hold. It also requires to you do a reality check on yourselves so that you can define your goals and priorities before entering the market.
Start Early:
When you invest in the market is more important than the market timing. Always enter the market with long term thinking. Do proper researches before investing set your priorities and goals, ascertain your risk profile. Also very importantly you should keep yourself abreast with the daily market news. One should not do impulsive purchase allowing emotions overpowering the sense of reason.

Know yourself and then What You Are Buying:
The first step towards achieving your goals would be to know yourself, your risk appetite and accordingly make the investments. Once you have discovered yourself, explore the market and find out the kind of funds available in the market. Firstly, get a hang on the style and strategy followed by a fund by reading the available material. This will help in diversifying the portfolio and also in assessing potential risks. In general, large-cap value funds are less risky than small-cap growth funds.

MUMBAI: Investment proposals plunged to a five-year low in 2011 as companies such as GMR and Reliance Power halted projects due to administrative hassles, threatening to amplify the economic slowdown in 2012 and delay recovery even with rate cuts from the central bank.

A prolonged phase of weak investments could increase loan defaults by companies or call for restructuring of debt, denting banks’ profitability.

New investment proposals in 2011 fell 45% to 10.46 lakh crore, from 18.88 lakh crore a year earlier, data from the Centre for Monitoring Indian Economy (CMIE) shows.

“If investment-led growth does not happen, we will manage to have a GDP of around 6.5% over the next 3-5 years,” said A Subba Rao, chief financial officer, GMR Group, which runs airports and utilities. “Investment is weak and if the government does not act fast, it may come to a grinding halt. The government needs to work overnight and carry forward reforms and approve policies over the next 2-3 months for things to improve.”

Companies have frozen investments as government flip-flop on policies are blurring returns, especially in the power sector that guzzles capital and needs scores of departmental approvals for smooth execution. State investments are also slowing as welfare programmes take precedence over asset creation.

With many projects stalled, banks are also reluctant to lend for fear of bad loans. The 13 rate increases by the RBI have made funds expensive.

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