Archive · 8 Oct 2026
How First-Time Investors Can Choose the Right Mutual Fund
There are many mutual funds, so picking one can feel confusing.
Rhishabh Garg says to first decide what you are saving for and when you will need the money.
You should also think honestly about how you would feel if your investment lost value for a while.
Money needed soon may be better suited to funds that focus more on stability, while long-term goals may allow more investment in shares.
Some share-focused funds can go up and down more than others.
Don’t choose a fund just because it had the best recent returns.
Compare how it did over several years, including when markets fell, and check its costs.
Then shortlist a few funds that fit your goal instead of buying lots of different ones.
FundsIndia.com CEO Rhishabh Garg advises starting with a financial goal, investment horizon and realistic tolerance for losses.
The article suggests debt funds for money needed soon, hybrid funds for nearer-term goals, and equity funds for goals five or more years away.
Large-cap and flexi-cap funds may form a core equity allocation; mid-cap and small-cap funds can be more volatile.
Investors should compare performance over several years and through falling markets, rather than choosing based only on recent returns.
Garg’s “Goal, Category, Check” approach narrows the options before comparing three or four funds on consistency, costs and fund-house stability.
- Who
- Rhishabh Garg, CEO of FundsIndia.com, offers guidance for first-time mutual fund investors.
- What
- Advice on selecting mutual funds based on goals, time horizon, risk tolerance and fund comparisons.
- Why
- To help new investors narrow hundreds of schemes and choose funds suited to their goals and ability to tolerate market volatility.
Short-term returns
Long-term suitability
How to judge a fund
Short-term returns
A fund’s recent high returns may attract investors looking for strong performance.
Long-term suitability
Garg cautions that recent returns alone can reflect a temporarily favored style or market segment; investors should consider longer-term consistency, performance in falling markets, costs and fit with their goals.
- Expert
- Rhishabh Garg, CEO of FundsIndia.com
- Suggested framework
- “Goal, Category, Check”
- Shortlist size
- Compare three or four funds, then select one or two suitable funds.
- Short-term horizon
- Debt funds may suit money needed in a year or two.
- Longer-term equity horizon
- Equity funds are described as better suited to goals five or more years away.
- Risk tolerance example
- Consider how you would react to a portfolio decline of 20–25% during a difficult market.
- Performance checks
- Review three-, five- and, where available, 10-year performance, including falling markets, and compare with benchmarks and peers.