Three types of funds you can look at in this red-hot market

When the markets are doing well, like they are right now, investors can become like kids in a candy store. Take the case of investing in a mutual fund. When you enter the fund universe, you instantly see over 1,400 funds spanning 40 categories staring at us. The options can excite and confuse us in equal measure. It can excite us because we see most equity funds in a bull market gunning out great returns; it can confuse us because we forget our risk appetite and goal and simply end up chasing returns. However, this is where we can trip up, especially investors who are fairly new to the market and unaware of how quickly things can change. Simply looking at performance numbers can make us commit unforced errors that we may later repent. But worry not, here are three fund categories that can help you navigate all stages of the market with relatively less anxiety. Equity Linked Saving Scheme (ELSS) Also known as tax-saving mutual funds Why are they good? It helps you grow your wealth and save taxes at the same time. Who should look at these funds? Investors who have opted for the old tax regime. You can claim a tax deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. New tax regime investors can also look at them if they want to be disciplined with their investing, however, they will not be getting any tax deduction benefits. What you should be aware of? These funds have a three-year lock-in period. However, it is still better than other tax-saving options like the Public Provident Fund (PPF), which has a 15-year lock-in. On second thoughts, a three-year lock-in isn't too bad for new investors