Need advice investing 13L in mutual funds

[WarDoGG]

Hi, new on this forum and would really appreciate some help regarding some investment advice.

I have sold off my business (my ONLY source of income) and have kept 13L as funds for investing.

I would like to earn basic living from mutual fund investments by investing this money.

* How much monthly income can i expect to earn by investing in mutual funds ?
* Which mutual funds are good for a stable monthly income ?

Here is where i have invested my funds :

I would really like some opinions from the expert people here who know tons more than i do.
Have i made the right decision ?

The dividends which i am getting currently are not more than 500-600 Rs per mutual fund.
where am i going wrong ?

Also, If i decide to withdraw the money after 5 years, will i get the "latest value" or "the value which i invested" ??

Any advice is highly welcome. Thanks in advance.

 

[WarDoGG]

Eagerly waiting for some replies..

 

[AW10]

WarDoGG.
Plz don't get me wrong if I ask few straight forward but tough question in my post below.
Intention is to understand your what is in your mind and how realistic you are about the MF investment. If questions are too personal to answer on open forum then plz don't answer them here. BUT PLEASE DO YOUR HOMEWORK and GIVE ANSWERS TO THEM. If in doubt, then ask new question here.

I have sold off my business (my ONLY source of income) and have kept 13L as funds for investing.

So you want to generate new source of income. How much education, experience, time and effort it required for you to establish your last business ? Are you ready to invest the same to develop new source of income ? How much time you can survive without ZERO income or -ive cash flow from new source of income ?
How much you really know about Mutual fund investing / stock market investing ?

I would like to earn basic living from mutual fund investments by investing this money.

How much is your monthly cost of living ? Do u know typical returns from the MF ? Do you know that they don't gurantee +ive return. There are some Bond funds giving +ive return every month, but their return is in the range of 7 to 8% per ANNUM. If MFund goes -ive in particular month then what will you do ?

* How much monthly income can i expect to earn by investing in mutual funds ?
* Which mutual funds are good for a stable monthly income ?

Different type of funds give different returns. Majority of them underperform the Sensex / nifty. On monthly basis, I don't think even best fund can give more then 6 to 10% return when market is good. When market is bad, the return goes -ive. Finding the fund which will give u this kind of return is challange.
Please don't expect last 9 months of their performance will get repeated in future. Just look at what happend to them from Mid-2008 to Mar-09 as well to get real picture..

check out some internet site - valueresearchindia DOT com is one good resource. you will be able to get answer of most of your queries there. Else feel free to ask them here as well. There are some good MF investor who can answer them.

By the way, if you are investing in MFund, then after placing your buy/sell request, what will u do for rest of the month ? are u planning to start new business or new source of income.

My frank opinion, if you are not smart enough in handling them then MFund sales team, agents, and even fund managers are eying on your money for their own benefit.
They will comeback and tell u that when mkt has gone up 60%, their fund has gone up by 80%. But when u ask them about -ive period of the market, then their answer will not be straight forward but they will start telling stories about long term investment, value buying, averaging etc. But if you are smart, then u can use them for your advantage.

Hope this helps.
All the best.

 

[WarDoGG]

First of all, thanks alot for your reply and really appreciate the time and effort you've put in to help my case.

Now, to answer your questions, I'm 22, work in software development and earn a decent amount to sustain a living. The business that i mentioned about was my parents.

I have absolutely Zero knowledge about mutual funds and stock markets. However, i have the capacity to digest a -ve return in a particular fund in a particular month, as you previously said.
With the help of a fund manager, i helped my parents invest the money we got from our business. However, i think the fund manager is suggesting Mutual Funds which might give him more commission than giving priority to our needs.

Do you think i have invested in the right funds above ?
If i take some advice from other internet sites, can i buy the mutual funds myself than using the help of a fund manager ? How do i go about it ?

Though i have little or no knowledge of investing and MFs, i am very open to learning and really appreciate your response to this regard.

 

[alpha_high]

Mutual Fund investment can be tricky. Usually the pay off from most of the funds is linear since they are invariably pegged to a border market index. Hence, when the market corrects (correction can be spread over a prolonged period) your estimated/expected return can take a hit. I have some good material explaining investment in MF, hopefully it should be of some use to you. Give me your email id and I'll glad to share it with you.

Good luck and happy trading.

 

[pasha]

However, i think the fund manager is suggesting Mutual Funds which might give him more commission than giving priority to our needs.

This is always the case, never listen to them. Do your own research and then invest.

In April 2009, all MFs were down from 40% to 90%, just so you know what the worst case scenario could be.

 

[Class]

Hi Wardogg,

MF's are simply a diversified investment in the STOCK MARKET. IMHO it is best over the long term, as an investment of at least 5 years and more. Stock market goes down as well as up. What will you do if the market trades sideways this year or even has another major dip?

Perhaps look to put part of the money in MF's for the long term outlook and learn some strategies which will give you an income in the medium term - 3-9 month investments.

There is also another option called ETF - Exchange traded fund. It is something like trading a complete Mutual Fund as a single stock. You can hold some shares for the long term as a MF and some shares swing trade for the shorter term.

The best investment would be to put your cash somewhere safe and spend the next 3 months studying and paper trading strategies from this forum. With your background in software development you will learn a huge amount quickly.

Hope this helps,