To minimise the occurence of cuttting losses, try to avoid buying into newly launched funds. You should instead invest in a UT fund with at least 3-5 years track record. Then at least you can check on the unit price movements, dividends declared, stock holdings etc and also whether the fund is keeping to their stated objective. For example, if the fund's objective is to invest into dividend yielding stocks, then you must check that they don't invest into stocks that doesn't have a history of paying dividends.

A safer investment strategy is to pick a low/medium risk fund as your core investment. About 60% of your money should be in your core. The balance could be invested into higher risk funds, which will provide the upside potential. Once you decide on the ratio, you should re-balance your investments semi annually according to the set ratio.

Using DCA for the higher risk funds is advisable.