There a host of mutual fund schemes available in the market for retail investors planning to invest their money in such schemes and often it is very difficult to choose the most suitable scheme.

The equity segment alone has more than 400 schemes available from various financial houses. These schemes include different investment mandates, holding period, risk profiles and other aspects, which make it very confusing for investors to choose the most suitable profile.

In order to address the issue, investors must first decide upon the purpose of investment. Whether it is to generate a certain amount of returns or seek an appreciation in the capital invested. The investors must also look into the amount of time they are planning to invest the money and the level of risk they are ready to accept on the investment. Such analysis will allow investors to have a clear picture about that they seek from the investments and will help them in choosing the most suitable mutual fund scheme for their investments.

The goals and preferences of the investment must be evaluated with the objectives of the schemes, as most schemes have clearly defined area of investment.