Between equity mutual funds and debt mutual funds, what would you recommend we invest in?
-Jayant
The kind of fund that you invest in shouldn’t depend on what we recommend; it should be based on your investment requirements and time horizon. If you're investing for a few days, consider a liquid fund. On the other hand, the money that you're unlikely to require immediately and can be put aside for a few years should be invested in equity funds.
You should also invest a certain part of your assets in fixed income funds to moderate the risk that comes with equities. Hence, most first-time investors can do well by beginning with balanced funds, which give you a fairly steady ride to begin with.
This article was originally published on December 05, 2012.