To begin with, it is important to select the right scheme for your investment need. Look at it this way.
How do you decide what mode of transport you should take when you travel? Whether you want to walk it up, take an auto rickshaw, a train or a flight, it all depends on your destination, on your budget and travel time available.
Planning for your financial goals is also uses the same kind of principles.
Different modes of transport for different travel needs – different schemes (or combination of schemes) for different needs.
One may consider liquid funds for very short term needs; income funds for medium term needs and equity funds (or a combination of different funds) for long term needs. Different investors may invest in different schemes of the same asset category depending on the risk that they are willing to take.
Remember, there are solutions available among Mutual Funds for each investor need. It is important to understand one’s own unique need to find which solution is appropriate.