As we move into 2009, the level of pessimism among the investors is deepening and most expect it to be another tough year. However with the stimulus being given by the governments across the world, the investors must ensure to make the right investment choice now. This article puts forth mutual funds as an ideal choice and compares the performance of various funds.

The global financial crisis has shattered the investors' confidence and has posed a serious threat to the global financial stability with the death of Lehman Brothers, the emergency rescue of American International Group, Inc. (AIG) by US Treasury, the merger of Merrill Lynch and Bank of America and the take over of Bear Stearns by JP Morgan Chase. As the world bids goodbye to one of the worst years, the year 2009 has started out with a gripping sense of fear and greed. The investors have been in a dilemma over the last few weeks as the markets have been moving in a narrow corridor. Investors have become so scared that they have even stopped investing in Systematic Investment Plans (SIP). They are instead preferring the fixed maturity plans. Considering the situation of the financial markets, investors have started feeling that stock market investments have no future at all.

No matter how much investors would like to forget 2008 for its financial disasters, it is important to remember the year for the hard lessons it taught us. The US housing bubble has burst and the asset prices are down to unrealistically low levels, just as they were trading at unrealistically high levels at the beginning of 2008. The global investment banks count has reduced from `five' at the end 2007 to `zero' at the end 2008. The year 2008 could be termed as good, bad and ugly because during the first two weeks of 2008, the markets were on a roll, sending the 30 share sensex to its all time intraday high of 21,206.77 points on January 10, 2008. The black Monday of January 21, 2008 came when the index lost around 2,000 points intraday, but managed to close with a loss of 1,392.30 points or 7.32%, one of steepest falls ever. Then started a prolonged period of volatility, which brought the sensex to its 52 week intraday low of 7,697.39 points on October 27. In the calendar year 2008, the loss of mid-cap index was higher at 66.95% and that of small-cap index was even steeper at 72.41%. So the year 2008 was filled with an unprecedented volatility. Almost all asset prices witnessed their highs and lows in a span of few months. During market declines, the overpowering urge of the investors is to dump stocks or equity mutual funds and to retreat to the safety net of the money market funds and bank deposits. A few risk-averse investors want to hold cash, while some others park their funds in gold.

Portfolio Organizer Magazine, Global Financial Crisis, American International Group, Lehman Brothers, Systematic Investment Plans, Stock Market Investments, Global Investment Banks, Equity Mutual Funds, Eugene Fama Model, Debt Investments, Net Asset Value, NAV, Indian Economy.