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.

Be A Disciplined Investor:
Once you’ve chosen some funds, you may stick with them. It is not necessary that one should always go with the tide. Even the unpopular groups tend to outperform in subsequent years. Investing a regular amount of money at regular intervals may add a good value to your portfolio. Make a systematic investment plan which in all probability likely to offer reasonable returns.

Who is a Stock Broker?
A stock broker is a person or entity, which is a member of a stock exchange. A stock broker acts as a facilitator to carry out transactions of investors on a stock exchange. Thus if you want to buy say 100 shares of a company XYZ (which is listed on say National Stock Exchange) in the secondary securities market, he would have to go through a stock broker registered in NSE to carry out his transactions on National Stock exchange.

Whether stock brokers are governed by any Rules and Regulations?
Stock brokers are governed by SEBI Act, 1992, Securities Contracts (Regulation) Act, 1956, Securities and Exchange Board of India [SEBI (Stock brokers and Sub brokers) Rules and Regulations, 1992], Rules, Regulations and Bye laws of stock exchange of which he is a member as well as various directives of SEBI and stock exchange issued from time to time.

What are the documents to be signed with stock broker?
Before start of trading with a stock broker, you are required to furnish your details such as name, address, proof of address, etc. and execute a broker client agreement. You are also entitled to a document called Risk Disclosure Document, which would give you a fair idea about the risks associated with securities market. Please go through all these documents carefully.

What to check while registering with a stock broker?
Every stock broker is required to be a member of a stock exchange as well as registered with SEBI. Examine the SEBI registration number and other relevant details can be found out from the registration certificate issued by SEBI.