From thousands of Mutual Fund schemes available in the market, how does one choose 4-5 most appropriate funds for his/her portfolio? If you are new to Mutual Funds, investing with the help of an advisor/distributor through a Regular Plan is advisable instead of a Direct Plan, since you need to understand how funds work, what should you look for in a fund, which kind of fund to invest in, etc. It’s better to bear the distributor’s commission in a Regular Plan than ending up with a wrong set of funds in your portfolio which can derail your future goals.
Unless you understand the types of funds, how funds build their portfolio as per investment objective, level of risk in a fund, whether a fund is suitable for short-term or long-term, will it provide regular income or wealth creation, which are the performance indicators of a fund and finally why are you investing; you need guidance in selecting the right funds for your goal. A Direct Plan works well only for those investors who have been investing in mutual funds for some time and understand these products. It would be a good idea to start investing in a Regular Plan and shift to Direct Plan for future purchases after you have gained some experience with your existing portfolio.