However, not every mutual fund is suitable for every investor. Equity funds can be appropriate for long-term goals, provided the investor can tolerate market volatility. Debt funds have different risk and return characteristics, while liquid funds may be considered for certain short-term parking needs after assessing their risks and suitability. “The first step, therefore, is to identify when the money will be needed and how much uncertainty the investor can afford to take,” says Baul.
