What is the most important component of taking an investment decision2?
There are various avenues of investment like guaranteed return products - PPF, endowment insurance plans, Fixed deposits etc and some more riskier - investing in debt and equity mutual funds, property, bonds etc. So you should take your investment decision based on your ability to take risk. So if you are a 30 year old working individual then you can put your money in equity mutual funds. However if you are a 60 year old, nearing your retirement, individual then putting at least 50-60% of your money in debt mutual funds, Senior Citizen Savings Scheme etc makes sense because you now need to protect your principal since there is no further monthly pay cheque forthcoming. Do consult your MFD to determine your risk profile before investing.