How should one choose between Equity and Debt when it comes to investments?

For short term investments (less than 5 years), choose debt funds and for goals longer than 5 years, choose equity. Some investors may choose debt funds for longer investments as well because they would like more certainty. In that case the decision between equity and debt is the decision between an almost certain 9% return (for debt funds) and an uncertain 16% return (for equity funds).

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