- Before you make any investment in Mutual
Funds, you should decide about the level of risk which are ready to
take. In case you are read to take maximum risk, you can
opt for Equity Funds or even Sector Specific Funds.
However, if you want to take only moderate risk, you can opt for
Diversified Funds or Balanced Funds. In case you are ready
to take only the minimal risk opt for Gilt Funds etc.
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- Try to invest in a Mutual Fund which is
professionally managed and has shown good returns in the past.
Although, the past trends can not guarantee the similar returns in the
future, yet it gives clues as to the management of the fund.
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- In case you are ready to take higher risk
in Equity Funds, you can make investments as and when the market shows
some steep fall due to some unexpected events and the market is likely
to revive soon.
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- In case you have large sums but wants to
invest for a very short period say less than one month, you can
explore the possibilities of investment in Liquid Funds or Money
Market Funds, which are likely to give you higher returns than the
returns given by Saving Fund accounts etc.
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- In case of some tax concessions available
for dividend pay outs of the Mutual Funds, you should evaluate the
same keeping in view the total income and benefits that can be drived
by investments in such Mutual Funds.
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