Choosing the best fund vs the right fund

Dhirendra, how do you differentiate between what's best and what's right in the context of choosing a mutual fund? Dhirendra: People simply want to know the names of two to three best funds to invest in. But I think that's the wrong question to begin with. They should focus on figuring out the most appropriate fund instead of the best one. By most appropriate fund, I mean the one most suited to a particular investor. Appropriateness varies dramatically. It depends on the time period for which you want to invest the money and how critical the goal for which you are investing is. An appropriate fund would be different for someone who wants to invest for a time period of 10-15 years and another person whose goal is only two to three years away. Another factor which matters is how experienced you are in equity investing. The scale of money and your risk tolerance also matters. So given all these variables - how far the goal is, how critical it is, your risk tolerance and how much experience you ha

This article was originally published on July 01, 2019.