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How do I choose the right fund for me?

Your choice of fund should depend upon your circumstances, your goals, and your time horizon, says Dhirendra Kumar

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Which is the right fund for me? What criteria should I consider?
- Arun Kumar Dubey

There is no straight answer to this as it entirely depends on your circumstances, your experience, and the scale of the money you have. But I will not get into the complexity of scale of money.

So coming to investment, where do you start from? If you have never invested in market-linked investments and have never seen the turbulence in terms of market movements, then start with an aggressive hybrid fund. I'm assuming that all these investments are for at least five years and more. If you are a taxpayer, then go for a single tax saving fund. If you are not a taxpayer, then start with an aggressive hybrid fund. This advice is for a rookie who has never invested in market-linked investments before.

Then the second stage is the evolution of an investor. She/he has gotten used to the market gymnastics and understands that equity generates more returns and is now comfortable with the ups and downs of the markets. At this stage one should put all long-term money (five years or more) in two equity funds since equity turns out to be the best performing asset class over such periods. However, just make sure to never invest your money at one go.