Which is the best mutual fund according to your risk appetite
An investor should also consider several other things before investing.

you must check what kind of investor you are and find out the risk that you can tolerate
People prefer investing in mutual funds as they know that it is safer than choosing stocks. It sounds easy for investors to choose a mutual fund and keep investing in it to generate good returns. However, selecting the right scheme is not an easy one. You cannot choose a mutual fund product mainly based on its past performance. An investor should also consider several other things before investing, such as downside risk, fees, consistency of its performance etc. Read this post to know how to choose mutual fund schemes to invest based on your risk appetite.
Risk and returns in mutual funds
Mutual funds are a suitable investment option for people to plan their financial goals. This investment instrument is sufficient to cater to a large spectrum of risk appetites. It is highly important to consider the risk factor while investing in mutual funds because returns from this investment also related to its risk factors. Choose funds with high risk appetite if capital appreciation is your investment objective. At the same time, you can consider taking risks if you look for a long investment horizon.
Even if you look for long investment horizon with capital appreciation, but not high appetite for volatility, then also you can find suitable schemes in mutual funds. Investors have different risk tolerance even for two different investment objectives. But if you look at its investment objective and horizon, both have goals similar in nature.
Choose the right fund based on your risk appetite
An investor can invest in mutual funds to earn better returns for short-term than fixed deposits. He can also plan his long-term investment goals with mutual funds like his children’s education, their marriage, purchasing a house or his retirement. The risk tolerance can be varied from investor to investor. Some investors have a high risk appetite for planning his retirement investment but he has a low risk tolerance when it comes to investment for his children’s higher education. So, the investment goals can be different for each individual.
Consider the following things before you investing in mutual funds:
- Your investment objective (income generation or capital appreciation)
- Time horizon of your goal (short-term, medium-term or long-term)
- Your risk tolerance (risk that you are ready to take with investments)
- The liquidity requires over the investment period
What kind of investor you are.
If you prefer to invest in equity mutual fund, you must check what kind of investor you are and find out the risk that you can tolerate. Large-cap mutual fund schemes or equity-oriented balanced schemes are suitable for you if you are a conservative investor. Choose only large-cap or multi-cap mutual fund schemes to investing in if you are a moderate investor. Mid-cap or small-cap schemes are better suited for aggressive investors. You can also consider including sectoral schemes in your investment portfolio as a low-risk investor if you have a good understanding about different sectors. You can consider your mutual fund advisor to choose the right schemes based on your investment goals and risk appetite.
Do you think you have chosen the right mutual fund scheme to invest based on your risk appetite? Mutual fund offers different schemes and picking any scheme to invest your money might not help you to reap good returns. You cannot pick any mutual fund plan randomly and invest in it without knowing your risk profile and investment horizon. Identify your goals and know your risk profile before investing in a mutual fund scheme. Some investors combine different mutual fund schemes to make a perfect portfolio for them. But they do not consider the composition of the portfolio in such cases. So, consider risk appetite and investment horizon before choosing the right schemes for your mutual fund investment.
That’s why Comparte Investment team asks do you have “Nivesh Ki Aadat”.
With this one can say “Mutual Fund Sahi hai”, so let me do Nivesh / Enquire
Related Links:
- 10 Things to know before finding best mutual funds for SIP
- 11 Difference between stocks and mutual fund
- Are you prepared for your retirement?
- As an investor, what should you look into an offer document (OD)?
- Asset Allocation is Important
- Attaching goals while investing in mutual funds
- Balanced Mutual Funds in India
- Benefits of investing in mutual funds in India
- Conservative hybrid funds
- Difference between Exchange Traded Funds (ETF) and Index Funds
- Does Mutual fund provide risk diversification?
- Dynamic Asset Allocation Funds or Balanced Advantage
- Effects of Mutual Fund on Indian Economy
- Entry load and exit load in Mutual fund
- ESG funds (Environment, Social and Governance)
- Factors influencing the investments decisions of retail investors in Mutual funds
- Gilt free Gilt mutual Funds
- Gilt Fund with a 10-year constant duration
- How do you evaluate mutual funds’ performance?
- How mutual fund systematic transfer plans or STP work
- How side pocketing works in mutual funds?
- How single mothers can secure their children’s future
- How SWP from Equity Hybrid Funds can be useful to get regular return
- How to check your mutual fund KYC status online
- How to invest online in mutual funds in India
- How to start SIP in mutual fund?
- Hybrid Funds- to enjoy the best of both equity and debt funds
- In India how to invest in mutual funds
- Know about nomination in mutual fund schemes
- Know the advantages of starting your SIP early
- Let’s talk about Equity Linked Savings Scheme (ELSS) of Mutual Funds
- Let’s talk about Venture Capital Funds
- Low Duration Mutual Funds
- Medium Duration Mutual Funds
- MF is a retail product designed to target small investors, salaried people and others
- Mistakes to avoid while investing in mutual funds
- Mutual fund for children’s higher education
- Mutual Fund KYC How you can do
- Mutual fund past performance and consistency
- Mutual funds and Insurance plans
- Mutual funds for Beginners
- Penetration / Reach of Mutual Funds in Tier-3 Cities
- Regular mutual funds over Direct plans
- Selecting a mutual fund scheme
- Should I opt for SIP or bulk investment?
- Start online mutual fund SIP Investments
- Taking a loan against mutual fund investments
- The common myths about Mutual fund NAV
- The difference between Mutual Fund and ULIPs
- The different types of mutual funds in India
- The investor’s perception and preference towards Mutual funds
- The Mutual Funds in India
- The number of different schemes should one invest in?
- The role of a Fund Manager in the Mutual Fund scheme
- The working of Arbitrage Mutual Funds in India
- The working of Asset Management Companies in India
- Time is Precious
- Value Investing with Value Funds
- Various types of Equity Mutual Funds in India
- What are Banking and PSU Funds
- What are Corporate Bond Funds
- What are Credit Risk Funds
- What are diversified equity mutual funds?
- What Are Dynamic Bond Funds
- What are Growth Schemes?
- What are income mutual funds or income schemes in mutual find?
- What are index funds?
- What are Interval Mutual Fund Schemes?
- What are large cap mutual funds?
- What are Liquid Mutual Funds?
- What are mid and small cap mutual funds
- What are Money Market Mutual funds?
- What are Multi-Asset Allocation Funds
- What are mutual fund debt funds?
- What are Mutual Fund Fixed Maturity Plans
- What are Mutual Fund Monthly Income Plans
- What are mutual fund tax benefits
- What are Offshore Funds?
- What are Overnight Funds?
- What are sectoral mutual funds?
- What are the benefits of investing in mutual funds versus directly in shares
- What are Top Performing Mutual Funds in India
- What are ultra-short term debt mutual funds?
- What happens to money invested, If a mutual fund scheme is wound up?
- What if a fund changes its strategy?
- What is a Fund of Funds (FoF) scheme?
- What is Equity Saving mutual Funds
- What is Floater Fund?
- What is Gold ETF
- What is NAV of mutual fund
- What is SIP Top-up, and what are its benefits?
- What is tax saving mutual funds and how can it help create long term wealth
- What is the difference between an open-ended and close-ended scheme
- What should I do if fund’s poor results persist?
- When should you change your investment plan?
- Which is the best mutual fund according to your risk appetite
- Who and How are mutual funds regulated?
- Why should you consider Fund Costs?
- Why should you invest through Mutual Funds?
- Why should you monitor and review your fund
- Why SIP in Mutual Fund
- You Should Increase SIP Amount Now
- Alternative to Fixed Deposits