Choosing a Mutual Fund is too confusing? | How confusing is it to choose a mutual fund? | Is Choosing Mutual Funds Too Confusing?

 

It is true that there are many types of Mutual Fund schemes available – Equity, Debt, Money Market, Hybrid (Varna Sankar) etc. And there are many such Mutual Funds in India which manage hundreds of schemes among themselves. For this reason it appears that aiming at a particular plan is a complicated and confusing task.

 The choice of the scheme for investment by the investor should be the last thing that comes to his mind. Before this, there are many more important steps, through which many future illusions can be cleared.

First of all, an investor must have an investment objective, such as retirement planning or home renovation work. It needs two figures – how much will cost and how long will it take, as well as information about how much risk can be taken.

 In other words, a particular type of fund is recommended keeping in view the objective, objective and risk appetite of the investor. Let's say Equity or Debt or Hybrid and accordingly, a particular scheme is selected on the basis of past achievements, accurate portfolio etc.

 Conclusion That is, if there is clarity about the investment objective in the beginning, there will be less confusion regarding the selection of funds going forward.