05 September 2023
How To Ascertain Which Mutual Fund Is Suitable?
The most important factor before you choose a mutual fund is to understand your risk appetite. There are various categories of mutual funds for different kinds of investors. But remember that not all mutual funds are equity-oriented.
So, if you are a conservative investor, you may invest in debt mutual funds. However, also note that debt mutual funds may offer returns that are only slightly better than fixed deposits. So, conservative investors should rather go for hybrid mutual funds. A balanced advantage fund, equity savings fund or multi-asset funds in the hybrid category will suit those who cannot stomach volatile stock market moves.
An aggressive investor should consider pure-play equity mutual funds. Even within the equity category, one should understand the difference between large-cap, mid-cap and small-cap funds. If you really have a long-term goal, which is at least 7-10 years...