Making investment in any investment avenue is not a easy decision as it requires to put your hard earned money to risk and no body, means no body would like to play a risky game when this hard money is involved. Whenever you are out to take a decision, it is always a dicey situation.
There is a perception that investment into mutual funds is less risky than any other form of investment as it is managed by highly qualified and experienced managers but even after this, investment in mutual funds is not completely safe. Finally the fate of money invested in mutual funds do rely other market risks. So plainly speaking, choosing right mix of mutual funds is not a easy task. It can be done only when you have exact answer to a few few questions and those question are as follow:
- What is the objective of your investment?
- What is the time horizon of your investment?
- How much is your corpus available for investment?
- What is your target amount at the end of investment period?
- Finally, what is your risk appetite? High, Moderate or Low?
The answers to these question help you find the right answer to question as how to choose the right mix of mutual funds. On the basis of your objectives, investment horizon and risk appetite, you can choose the right mix of mutual funds.