New Delhi, Oct. 8 -- Mutual funds have become a popular starting point for people looking to invest for long-term goals, but choosing the right scheme can be difficult for a first-time investor. There are hundreds of mutual fund schemes across large-cap, flexi-cap, mid-cap, small-cap, hybrid and debt categories, each with different levels of risk, return potential and investment horizons. The sheer number of choices can also push new investors towards a common shortcut, picking a fund simply because it has delivered the highest recent return.

But past performance alone does not tell an investor whether a fund is suitable for their financial goal or whether they will be able to stay invested when markets fall. For a first-time investor, t...