For people who do not know much about share markets and which stocks to buy and sell, then they can invest in mutual funds. In mutual funds, a mutual fund manager who has very good knowledge of the stock markets will manage your funds and you can get good returns on your investment.

The risk as well as reward is high in share market investments. If you invest in shares, which are fundamentally strong, then the risk of losing your principal is less. If you invest in dud shares, then you could lose the money invested with no gain. You should take care of the money you invest in shares and invest in fundamentally strong shares which has good growth potential in the middle and longer term.

Most of the investors due to greed factor invest in low priced stocks which are not fundamentally strong, to make huge money. There have been many bull runs and stocks which have zero value have run up to $100. People have made good money when they quit, when the bull run was at it peak. But many people hold on to the stocks thinking that they would go even higher but when the bears start hammering the stocks, the investors are unable to sell their stocks as there are no buyers for dud shares in the market.

Share market is a good option to invest. If you are thinking of a long-term investment then it is a good option. But, you should never invest all your money in one company. Never put all your eggs in one basket. At the same time you should invest in mutual funds, bank savings, bonds etc, which could provide a fixed rate of interest.