For beginners and for those who can’t or don’t have time to track market movements, the better choice is to invest in Mutual funds.
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities (stocks, bonds, short-term money market instruments, other mutual funds, other securities, and/or commodities such as precious metals). The mutual fund will have a fund manager that trades (buys and sells) the fund's investments in accordance with the fund's investment objective.
Based on the nature of investment, the funds are broadly classified into Equity, Debt, Balanced, MIP, Liquid, ELSS, ETF, Gilt and Index.
The return and risk is higher in Equity funds, since these funds are investing major portion of the money in stocks.
The Equity funds are mainly categorized as Large cap funds, Mid cap funds and Small cap funds.
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