I am new to investing field. I wanted to know whether it is wise for me to invest directly by buying ETFs like NiftyBees, ITBees etc or with mutual fund.
I am looking for very long term horizon and to invest consistently. I was just confused which is better way to go as I don’t want hop from one to another.
Thank you.
Active mutual funds are managed by professional managers and their teams. When the market falls, these funds don’t fall by the same proportion, as the managers take certain decisions, this is called downside protection. On the other hand index investing has no active management, if the market falls, index funds or the ETFs fall the same. In actively managed funds there exists downside protection, in index investing there is no such things. Not all active funds have the same kind of downside protection, but they all do to some extent, this is why they are paid fee, along with outperforming the index.
Unlike in the past, it is getting tough for the active funds to outperform the indices, but downside protection exists. So look at downside protection and outperformance, and choose active or passive.
If I had to look for a good mutual fund, what is the best way for me to measure which is good for long term. I have read a bunch of articles on selecting a good fund. It has done nothing but confuse me more.
Are there any suggestions from you.
Thank you.
Not an expert by any standards, but I would start off with an Index ETF or Index Fund, whichever is your choice and will invest small portion on a monthly basis into this fund and just forget it. Why I say, forget it, is because, Index funds/ETF represents the top 50 company of India. Twice a year (I think) they remove the laggards and bring in new companies, hence there is always somone monitoring the companies in the Index.
Disc: Do your own research, the above is based on my risk taking ability and quite happy with what returns the Index funds give which may or maynot be what an active funds generate.
First of all, you have to be clear about why you are investing, then invest in active or passive funds. If you have got any goal, which comes with a time frame and a corpus, then you can choose the path to reach that goal. Plan first, investments next.
You can invest without a plan too, but you have to be clear about this.
Equity is volatile, no matter which option you choose, you have to accept the volatility, which is the reason why you get returns more than debt products, and you also have to protect the gains, if you have a goal.
I will start with index ETF for now.
Thank you.
I want to invest because slowly and steadily I want build a corpus of funds which may help me out in future. I understand to not put my entire money in equity as it is volatile.
I want to save some money and put it aside for my future. I also want to do it consistently without moving from one fund to another.
If you are young and have a good income stream, then your risk preference can be slightly higher. As you age, you can reduce your equity exposure with increasing debt instruments.
First and foremost, you have to start investing first! 
This is exactly why I want to invest in ETFs or Mututal Funds. I am not knowledgeable in stocks. So I wanted to have exposure to equity via ETFs or Mutual Funds.
You should understand that, volatility is real, mathematically it is real, meaning if you invest and it is down for a couple of years, you will lose time, and thereby capital appreciation like in debt. It is not about investing, it is about capital appreciation, having more for your needs or wants.
Then index investing will do job, but here too, there will be occasions where active funds perform better than index funds, so you should not feel bothered by this.
Whichever you choose, understand how it works first. Learn, and then invest.
That is correct. Although most people don’t have the stomach for volatility or capital loss, when they actually experience it. It is one thing to say, I am young and I can take risk, and it another thing to actually experience, seeing their investments lose value by 20% or 30% is tough.
So yes, one can learn the basics, and start investing but cannot expect to get returns quickly.
Also, as you do FnO, I know that these all are known things 
100% agree.
I am a new investor myself. From what i have read about investing, investing consistently is the key to build wealth. etfs or index funds should be fine till you gain knowledge about investing in mutual funds.
Remember time is the factor here. Start early and keep investing consistently.
I Love the following two book for basics of investing.
The Simple Path to Wealth by JL Collins (Very easy to understand and follow) (Link to summary)
The Intelligent Investor by Benjamin Graham (Little difficult than above one, but very important)
Bonus: Following book is great for overall personal finance development
The Richest Man in Babylon
Thank you everybody for clearing my doubts and helping.
Just remember to invest regularly and consistently.
All the best.
