SIP – Page 3 – DV Mint

March 15, 2021

The Power of SIP

SIP or Systematic Investment Plan is a plan through which a person can invest a small amount in a mutual fund at regular intervals (monthly/quarterly).

Hardly pinches your pocket

Most of us spend some money every day buying and eating a snack worth around Rs 15 or 20. Just saving that amount enables one to start investing in mutual funds through SIP.

That’s how small an amount is required to get started investing through SIP

While we all love and deserve to spend our hard-earned money, keeping a small amount aside each month can go a long way.

How often do we spend Rs 500 just over a whim? We may decide to order through one of the many food delivery applications or may meet up with a couple of friends at a coffee shop. Before we realize it, we end up spending around Rs 500.

Thanks to rising income and a higher standard of living, it doesn’t pinch as much as it used to.

After all, Rs 500 is what a couple of movie tickets or a couple of pizzas cost.

Most mutual funds allow investors to start investing with Rs 500 per month.

For an individual who has never invested earlier, starting with Rs 500 per month is also a promising beginning.

Therefore, this becomes a great way for new investors to begin as regularly investing Rs 500 per month over a longer period wouldn’t impact the investor’s wallet even if there is irregular income due to job loss or sabbaticals.

Magic of compounding

Investors would agree that Compound interest is one of the most powerful forces in the world! This is because of the impact it has on one’s investments. Investing over a longer period will create substantial wealth.

Investing just Rs 500 per month can result in the following scenarios

Over 10 years, a CAGR of 12% will offer Rs 1.2 lakhs
Over 10 years, a CAGR of 15% will offer Rs 1.4 lakhs
Over 10 years, a CAGR of 18% will offer Rs 1.7 lakhs
Over 20 years, a CAGR of 12% will offer Rs 5 lakhs
Over 20 years, a CAGR of 15% will offer Rs 7.6 lakhs
Over 20 years, a CAGR of 18% will offer Rs 11.7 lakhs
Over 30 years, a CAGR of 12% will offer Rs 17.6 lakhs
Over 30 years, a CAGR of 15% will offer Rs 35 lakhs
Over 30 years, a CAGR of 18% will offer Rs 71.6 lakhs

Let us look at the illustrations which offer a CAGR of 12% across 10, 20, and 30 years.

Over 10 years, the investment of Rs 500 per month turns out to be worth Rs 1.2 lakh.

Over 20 years, it balloons up to Rs 5 lakhs, and over 30 years it swells up to Rs 17.6 lakhs!

We don’t lose our sleep

Over a shorter period markets tend to be volatile. Even after investing consecutively for 36 months, one may see that one’s portfolio is in red. If the invested amount is small, then a new investor can deal with this situation and not feel stressed about it.

If a new investor starts a SIP with a larger amount in a small-cap fund during a choppy market, the variance in a portfolio can cause the investor to chicken out and withdraw his holdings much before the magic of rupee cost averaging plays out

As the performance of a mutual fund in which an investor has started a small SIP improves, she acquires confidence to invest higher amounts.

Suitable for risk-averse investors

Some individuals only prefer saving in fixed income or debt instruments. Due to certain reasons, such investors prefer the security of lower returns rather than the opportunity presented by equity funds to beat inflation.

If they haven’t tasted the growth that an equity-based instrument brings in, introducing them to the same through small SIPs is a great idea.

Some investors may not stay through the course even though the monthly invested amount is tiny. Whereas some may realize the benefits of investing in equity-based instruments as well and may seek to increase the SIP amount.

Continue to invest in case of unforeseen circumstances

As the size of an investor’s portfolio increases, her confidence in the wealth-creating ability of mutual funds increases.

After experiencing market volatility and continuing investments regularly, the investor begins to appreciate the process of creating wealth by investing through small SIP when the mutual fund portfolio starts growing.

This offers a huge boost of confidence to the investor which may result in the investor bumping up her SIPs.

Acquire confidence to invest more over some time as our portfolio grows

We live in an uncertain world. Incomes have improved but job security, especially in private firms, is a big question mark. There may also be health-related situations that may cause an individual to stop working for a while.

We are also living in a time when individuals wish to make the most out of their lives. This includes taking a sabbatical to travel or quitting a well-paying job to start up.

During such scenarios, one may not receive a regular flow of income. Or the size of income could reduce. Small SIPs can still be kept going as they may not cause a huge dent in an investor’s pocket during such uncertain times.

Easier to develop the habit of financial discipline

Financial discipline is rarely something we are born with. We have to work on it. Let us take the example of goal-based investing. A newbie investor may start a small SIP to invest a certain amount over 5 years to achieve a goal.

However, after 18 months, this individual may be tempted to buy a new laptop and would be falling short of some amount.

If this individual decides to redeem the corpus which has been created so far, he may not only lose the opportunity of creating more wealth but would also fall back on his efforts to achieve his goal.

Therefore it is critical to adhere to financial discipline when it comes to investing. Starting small makes it easier to get used to this. It is worth creating a habit of putting aside a small amount.

Over some time, this would make it easier to deal with following a discipline of investing larger amounts.

Claim tax benefits

Investors who are starting their journey in the world of investment can look at ELSS to not only help achieve financial goals but also save tax. ELSS stands for Equity Linked Savings Schemes.

ELSS is riskier than the fixed income alternatives available for tax-saving under section 80C but has the shortest lock-in period among all these options. It also offers the potential for growth via equity.

Conclusion

Rome wasn’t built in a day. And neither is a huge corpus that can offer financial freedom. One can begin investing modestly and then slowly keep increasing SIPs without being influenced by noise.

Once an investor signs up to ride several market cycles then there is no looking back.

This is because the investor begins to understand the importance of continuously investing during good times as well as bad. Small SIPs are bound to do wonders for our financial health.

January 4, 2021

Markets at all-time highs: Should you exit & re-enter at lower levels?

The markets are high and they look overvalued. Many are worried about the expensive markets. But the bigger questions that investors must ask, are the following.

1. If it falls, then by how much?

2. What if it does not fall much; i.e., what if it is a time-bound correction and not a price-bound one?

3. ‘When’ will it fall?

Now, let’s apply this logic to the stock market. A lot of investors are in a dilemma: ‘should we book profits for now and enter again when the market falls?’

Let’s say you execute this thought and sell all your investments today with the plan of entering the market again when it falls.

And let’s assume your decision is proved right and the market falls drastically in the next few days or weeks.

If that happens, it is not good news. This is because if you are proven right in this decision, you will do it again in the future.

That is, you will ‘time the market’ again and again. And this is a bad habit. If you time the market 10 times in the next few years and you are wrong just 3-4 times out of 10, you may still lose money overall, forget about making great returns.

Check the records of successful investors. Do they follow this practice? If not, why? If they cannot or do not predict the market, what are the chances of you being right?

We have to be careful about the kind of actions we take, as they will become a habit. If this habit is a bad one, it will be very tough to leave it.

Now, let’s see if we can answer the three questions asked earlier.

1. What if there is only a time-bound correction?

Correction can be price-bound, the way we had in 2008 and March 2020. And it can be time-bound as well. That is, the markets remain in a certain range for a very long time.

Examples:

1) From July 2009 till December 2011, again, the Sensex was range-bound.
After moving in a range, the market started moving up again in both cases. If that happens again in the next few months or years, your plan to enter at low values may never fructify.

2) From December 1993 till February 1999 (for more than five years), the Sensex was range-bound between 3000 and 4000 levels.

2. If it falls, then by how much?

Did you invest a huge amount in March 2020? No? Maybe because you were waiting for the markets to fall more. We, as humans, have this deep desire to buy at the lowest level.

And who tells you where the bottom is? TV experts, your advisor, neighbors, colleagues, or friends?

Investing at the lowest point and exiting at the top is a matter of luck, not research. Therefore, the best strategy is to invest at every level. Even at today’s level in January 2021.

In a nutshell, make sure you are conscious of the habits you develop while investing in the stock market. This is what differentiates a successful and not-so-successful investor.

3. ‘When’ will markets fall?

I know investors who sold their portfolios in July 2020. The market had recovered significantly from its March lows and economic activity had hardly started.

Logically speaking, it was the right call. Many investors and experts were expecting the market to fall again.

We are in December 2020 now and we all know what has happened from July onwards. It is not about being ‘logically right,’ but about developing the right habit.

I also know a few of these investors who entered the market again in September-October 2020.

It was not easy for them to watch the markets grow continuously when they had sold their investments in anticipation of a fall.

December 29, 2020

5 Things to know before investing in ELSS Mutual Fund

Your insurance agent may be pushing life insurance as the best option, while your friend extols the benefits of a plain vanilla PPF account or even a tax saving FD with a bank.

And yet, there’s an 80(C) instrument that not just has a relatively short lock-in period of just 3 years – but has delivered a 5-year category average return exceeding 15% per annum and a 10-year annualized return of more than 17% per annum.

These are tax saving mutual funds or ELSS (Equity Linked Savings Schemes. These numbers may seem tempting, but make sure you’ve understood a few things about ELSS funds before you say “Tax Saving Mutual Funds Sahi Hai” and jump in with both feet!

1. They Have no Premature Exit Option

Tax saving mutual funds have a hard lock-in period of 3 years, and there are no options for partial or complete withdrawal. If you’ve invested in more than once tranche over the course of a year, each tranche will be treated as a separate purchase and will have to complete three years before you can access them.

2. They are High Risk in Nature

Being equity-oriented in nature, ELSS funds tend to be quite volatile. In a sense, that’s the price to pay for a significantly higher long-term return compared to low-risk products.

However, if you’re not willing to withstand ups and downs in your fund value, give ELSS funds a pass.

3. Their Returns Are Non-Linear

Many investors who are used to the linear returns associated with traditional products tend to get quite disconcerted by ELSS funds.

Understand that ELSS funds may go through phases of flat or even negative returns, but things tend to average out over the long term as cycles reverse. It’s vital to set your expectations right while investing.

4. The Dividend Option isn’t a Very Smart Idea

You may be tempted to go for the dividend pay-out option in an ELSS, but know that this isn’t a good idea.

First, you’ll take a hit of 15% in terms of dividend distribution tax. Second, dividends from ELSS funds are non-predictable in both timing and quantum, so you can’t really base any plans around them.

5. SIP’s are a Better Idea Than Lump Sums

For the next fiscal year, start a SIP in an ELSS fund instead of investing your money as a lump sum at the end of the fiscal year.

Your unit costs will get averaged out neatly, and it’ll be a lot easier on your pocket too!

December 14, 2020

Does SIP in an ELSS Makes Sense?

With the growing awareness about Mutual Funds more than doubling the industry’s assets in the past three years, more and more people are catching on to the fact that for tax saving, Mutual Funds Sahi Hai! ELSS (Equity Linked Savings Schemes) funds have shot up in popularity in the past year or two. Here are a few reasons why you should consider starting a SIP in an ELSS.

No Year-end rush

So many of us get caught up in the struggle of putting together enough funds to invest in tax saving schemes at the very end of each fiscal year. Not only is this stressful; it also puts you at risk of taking ill-thought-out decisions that you could potentially end up regretting later.

By running a SIP in an ELSS throughout the year, you’ll have completed the lion’s share of your tax-saving investments well in time – so while your friends and colleagues are fretting, you can sit back and relax!

Long Term Compounding

It’s a well-known fact that investments that are linked to the stock markets need the magic element of time to compound and grow.

By continuing your SIP in an ELSS over the long term, you’ll ensure that your money compounds – that is, earns ‘returns on returns’, and therefore outpaces inflation over the long run.

Compare this with tax saving FD’s or PPF accounts, which do not compound your money, and you’ll see the difference that a SIP in an ELSS Mutual Fund can make.

Rupee Cost Averaging

Since ELSS funds are linked to the equity markets, they can potentially be volatile. For this reason, you may find yourself in the unlucky position of having invested in an ELSS just before markets begin to correct, as many investors who deployed lump sums in ELSS Mutual Funds on or before 31st January this year realized.

By running a SIP in an ELSS, you’ll ensure that the average cost of your ELSS units gets averaged out neatly through the ups and downs of the markets.

December 1, 2020

What to start early: Investment or Insurance?

Several reasons why you should start investing and also get insurance at a young age. But, at the time when we start our career, with a little income and too many expenses, the dilemma that we often face is should we invest or insure first?

Through this blog, I will try to help you get over this dilemma, i.e. whether to invest or insure first.

Before I get it into explaining whether to invest or insure first, it is important to understand why it is important to start investing and also buy insurance (health and life) early in life.

2 reasons why you should start investing early

Starting your investments early improves your spending habits

At the time when we start earning, our income is quite low. And if we want to save from that little amount of salary that we get, then we have to put restrictions on our spending by creating a budget. Over the years this simple practice becomes a habit, eventually improving our spending habits.

To adopt the simple habit of saving/investing, put away the part of the salary at the start of the month. And, then make a monthly budget with the rest of the money you have in hand.

Say you earn Rs 30,000 monthly and out of that you want to save Rs 10,000 every month. So as soon as you get your salary, put Rs 10,000 away, and then create a monthly budget with the rest Rs 20,000.

You enjoy the benefit of compounding
For starting your investments early, you stay invested for longer, which automatically increases the benefit of compounding. Let’s understand this with 2 simple examples.

Say you want to save Rs 5 crore for your retirement. Now, with that goal in mind, you start investing in an equity mutual fund from the age of 22. For this, you will have to keep investing Rs 5,500 for the next 38 years, and your total investments would be Rs 25 lakh.

In the second case, the goal remains the same but you start investing in the goal much later, let’s say at 45. For this, you would need to invest Rs 1 lakh every month for the next 15 years and your total investment amount would be Rs 1.8 crore.

This is how compounding works in favor of money over the years.

After looking at the reasons why one should start investing early, let’s understand why it is equally important to get insurance at a young age.

Here as we speak about insurance, we mean both health and life insurance.
Speaking about health insurance, no matter what your age is you should always have health insurance.

Sickness or some health emergencies can come at any time and if you do not have health insurance, medical expenses can burn a huge hole in your pocket. So you should never delay the process of getting health insurance.

However, we often delay the process of buying a term life reason for very simple but foolish reasons. The common notions are since we are young and healthy or at this stage, as the responsibilities are less, we do not need term life insurance. However, contrary to the popular belief, buying term insurance early on is always favorable.

2 reasons why you should buy term life insurance early

The premium amount is low
The biggest advantage of buying term life insurance early on is the premium amount that you pay is much less as compared to what you would pay if you buy it at a later stage in life.

For example, say you want to buy a policy of Rs 1 crore that would give you coverage till 75 years. If you buy it at 25, the premium amount would be Rs 8,000 annually. At 30, it would be Rs 10,000. And at 45, the premium for the same policy would be Rs 30,000.

Your family gets covered early on
The sooner you buy the term insurance, the sooner your family gets covered. Even if you are not married, your parents might be dependent on you or you might have a loan (vehicle loan, student loan),

In case you die early then your family will have to bear that burden. Having term insurance ensures your family will not have to go through financial hardship in case something happens to you

So finally, whether to invest or insure first?
So, this is typically a chicken and egg situation – who came first.
To put more aptly, here it would be which one to do first, buy insurance, or start investing? Now, the best thing to do is to do both things simultaneously.

For example, let’s suppose Rajeev is a 25-years-old, and given his monthly income of Rs 40,000, he can take out Rs 10,000 each month, i.e. Rs 1.2 lakh annually, for savings/investments/insurance. So what should he do?

Here is how you can allot the money towards insurance and investments

Health insurance: It is a good practice to have at least 6 times your monthly salary as your health insurance coverage. By that logic, since Rajeev’s monthly income is Rs 40,000, his health coverage should be between Rs 2.4 to Rs 2.5 lakh. At the age of 25, the yearly premium amount for Rs 2.5 lakh health insurance would be about Rs 5,000.

Term life insurance: Since Rajeev doesn’t have a lot of liabilities, a term cover of Rs. 1 crore would be enough. Say the term life insurance cover that you need at this stage is Rs 50 lakh. The premium for a Rs 1 crore term policy would be around Rs 8,000 annually.

Investments: The rest of the Rs 1.1 lakh you can invest in Mutual Funds. Since Rajeev is young, he can take risks, and therefore you should invest in equity mutual funds. He can consider large-cap mutual funds or multi-cap funds and start a monthly SIP in these funds.

Now, as and when the income increases, he should also increase your investment amount. Rajeev should also review his health and term cover at regular intervals to ensure the cover is sufficient.

September 29, 2020

7 Things to do when your Mutual Funds are in Red

When investors seek higher returns, they invest in equity mutual funds. A higher return comes with a cost, in equity it is Volatility. Mutual funds are affected when the markets are volatile and this is why your mutual funds are going up & down.

Now many times when the market is volatile, such as now, investors panic and take decisions that may not be in their best interests. If you are an investor and wondering what to do with your investments in this situation, here are 7 things you can do instead.

Keep Calm
This is the absolute first step to successful investing.
The stock markets usually perform well over a long period. In the short term, volatility causes the price to go up and down.

While you can lose money in mutual funds due to short term market disturbances, if you look at the long term, instances of negative returns drastically reduce after 3-5 years of holding.

If you have a longer time horizon of say 7-10 years, you need not get disturbed by the news around and lose your calm. Don’t let the noise get to you.

Avoid Redeeming In Haste
Can you lose money in mutual funds in falling markets? Yes. But does this mean you should redeem your investments? No. Think twice before redeeming your money the moment you see the markets perform poorly.

Certain investors believe they can take their money out of a mutual fund when its value goes up and then invest again when the value starts going down. This sounds good in theory but usually does not turn out well.

What happens most of the time is that people take out their money from a mutual fund and wait for the right time. But more often than not, the timing isn’t perfect. What ends up happening is that people sell when the price falls.

And then, when they plan to invest again, they invest at a price higher than what they sold their mutual funds for. This hurts the long term wealth creation process.

So decisions like redemption should not be a factor of current market conditions. Investing in equity mutual funds via the SIP route is what comes to rescue in such cases since SIP frees you from market timing.

It also leverages rupee cost averaging to buy you more units when the markets are down.

Compare Performance With Other Funds in the Same Category
You may feel the mutual fund you have invested in is not performing very well. This may or may not be a time when the markets are doing well.

A good strategy at this point is to check your mutual fund’s performance with mutual funds in a similar category.

Also, mutual funds are long-term investment options. If you observe your mutual fund’s performance is only slightly poor when compared to the best-rated funds, switching might not be necessary.

Over a short period, various mutual funds perform in different ways. In the long run, the best mutual funds belonging to the same category usually give similar returns.

Compare Performance With Other Funds From Different Categories
Certain mutual fund categories are more volatile. This means, while they might offer great returns, they can also offer higher risk.

If you feel you are not up for the risk, you should look at the performance of mutual funds from other categories.

For example, small-cap mutual funds give very high returns. But they also have a higher risk. Relative to small-cap equity mutual funds, large-cap equity mutual funds have been less risky.

Also, you might want greater returns and be willing to take the risk. In that case, too, you should explore the best funds in the other category for investment.

Research the Sector
Another reason why your mutual funds are falling could be because your investments are sector focused. This point is relevant to you only if you have invested in a sector fund.

Sector funds invest only in a specific sector or industry.
Sector funds are considered the riskiest for a reason – they are even harder to predict when compared to other equity mutual funds.

So if you have invested in a sector fund and are losing money, pay attention to the health of that industry and its prospects.

If you think the industry has a good future, continue to remain invested. If on the other hand, you think the industry isn’t doing well, you should plan to redeem your money.

Diversify
This is perhaps the only way to counter your mutual fund loss at the moment. If your portfolio is exposed only to equity, then add some liquid/debt funds to the mix.

They will not only balance out your losses due to equity but will also allow you to raise money for short term goals. Also, diversify across asset classes.

Gold is considered as an excellent hedge against market volatility as gold prices usually go up when the markets are done. You can look at exposing about 5% of your portfolio to gold.

Can you lose money in mutual funds? The answer is YES. Should you have a knee-jerk reaction at seeing a red portfolio and make big decisions? Probably not. While the situation is uncomfortable, this too shall pass. Markets have bounced back before and this time also.

From temporary events like elections and geo-political tensions to recessions to pandemics, the economy has seen it all and thrived nevertheless. Investing is a long-term game and should be treated like one.

Stay calm, invest with a vision, keep yourself updated and you are good to go!

September 24, 2020

Sensex jumps 13000 – here are 5 mistakes to avoid

Cheering the Government’s move to unlock the economy, the stock markets rallying strongly, taking the Sensex up-to 39000. As an investor, here are five mistakes you should guard your portfolio against.

Don’t succumb to FOMO (Fear Of Missing Out)

You may have exited your equity investments and sat on the sidelines when things started heading down in March.

Now, with the stock markets have rallied 50% from the bottom, you could feel a strong urge to throw caution to the wind and push all your money back into equities all at once. However, this would be a mistake.

It’s highly unlikely that markets will continue its one-directional surge for very long. Once the euphoria settles, real data such as earnings growth and GDP numbers will come into focus and drive stock prices.

Going all in right now could mean that you’ll be staring at a heavy loss when the current rally retraces. Instead, it would be a lot wiser to stagger your way back in using weekly STP’s (Systematic Transfer Plans) over the next 3-4 months.

Beat the Action Bias!

If you were among those who saw their investments sink deep into the red when markets capitulated in March, you may be itching to take some sort of action with your portfolio, now that the notional loss is lower.

There’s absolutely no need to jump the gun and make rash decisions to exit your investments at this time. Remember, you got into equities for the long run – so remain invested through the ups and downs, and let the economic recovery play out properly over the next year or two.

Moving in and out of your investments will surely work to your detriment in the long run.

Don’t stop and start your SIP’s

Remember, we’re not out of the woods as yet. What we are seeing right now is nothing more than a euphoric, liquidity fuelled spurt in stock prices because the lockdown was lifted.

Though the worst may very well be behind us for now, stock-markets wise, a long and winding road towards economic rehabilitation lies ahead. As the world adjusts to the new normal, we’ll see plenty of volatility in the markets.

It’ll certainly be a few quarters before consumption returns to pre-COVID levels. In the interim, we may witness more measures to curtail the spread of the virus, which may hurt market sentiments.

Some businesses will flounder, while others will adapt and grow. In such a volatile scenario, the best thing you can do is to allow your SIP’s to continue dispassionately – a month in, month out.

Stopping and starting your SIP’s would be a big mistake. Just sit tight and let Rupee Cost Averaging work its magic.

Don’t time the market

With the number of variables and incoming data prints involved, it would be impossible to predict the short and medium-term direction of the markets during this time.

You may have one bullish month followed by a severely bearish month, followed by another surge. Towards the end of May, banking stocks rallied 10% in two days for no apparent reason! In times of such extreme volatility, any attempt at trading would most likely land you in a big soup.

Whatever you do, do not try to time the market; instead, follow a disciplined approach to investing, staggering investments into the markets using a well-planned approach wherever necessary.

Don’t invest unadvised

In choppy waters, the support of an astute Advisor can prove invaluable. In such times, even the most seasoned investors can fall prey to a host of behavioral biases that will work to their long-term detriment.

Your Financial Advisor can be the much-needed voice of reason that will help you make better investment decisions. Choosing to invest unadvised to pinch a few pennies would be a highly regrettable decision right now.

Don’t fly solo – instead, hand over the controls to a conflict-free, competent Financial Advisor who is acting in your long-term interest!

September 22, 2020

Five Bad Habits That Are Really Good while Investing

Not on Time – This is one of the most common bad habits. But this bad habit can do wonders to your equity portfolio. One thing that even Warren Buffett doesn’t do is to try to time the stock market. A majority of investors, however, do just the opposite, something that financial planners have always been warning them to avoid, and thus lose their hard-earned money in the process.

So, you should never try to time the market. In fact, nobody has ever done this successfully and consistently over multiple business or stock market cycles. Catching the tops and bottoms is a myth.

No News – Staying updated with the latest NEWS is a very good habit but this could help you lose money in the stock market. Breaking news tends you take wrong financial decisions.

There is a lot of information/news flowing around in newspapers, Social Media, TV, Internet. This information/news is so well decorated for you to take instant action. News tends you to forget fundamentals and emphasis recent events.

Staying away from such breaking news can help you stick to the fundamentals and grow money with the stock market.

Lazy Action – When it comes to investing, people often say that the more active you are, the wealthier you can become. However, it acts in reverse when it comes to investment in the Stock Market!

So, if you are too active with your portfolio, you are likely to get fewer returns! Shockingly, laziness will help you to get more returns! Yes, you read that right! Notably, investors should choose this for long term investment.

And what is more, market variations will not hurt your investment gains. Invest in good Stock/Fund and forget is the best strategy.

Being Unfaithful is really a bad habit but this bad habit can lead you to make more money while investing.

People usually hold a Stock/Fund/Lic because that is very old or is gifted by their Parents or Grand Parents.

Investors lose money and opportunity when are emotionally attached to some stock/financial product that is inherited and doesn’t sell them even it is not making money.

A good return paying Stock/Product/Strategy will not always give a return. Being unfaithful with your investment & exiting will open new opportunities.

Do Your Own – Following your friends/family/acquaintances is a good habit that can often lead to wrong financial decisions.

The typical buyer’s decision is usually heavily influenced by the actions of friends/family/acquaintances.

Thus, if everybody around is investing in a particular stock/fund/asset-class/product the tendency for potential investors is to do the same.

But this strategy is bound to backfire in the long run. Stop following the herd and use your brains to do your own.

Like it or not, bad habits are bad for you — mentally, physically, emotionally, and even financially.

While some bad habits listed above are extremely good for your financial portfolio and you need not get rid of them.

September 22, 2020

7 steps to make Rs 1 crore in the quickest time

How does one become a Crorepati? We have all thought about this one question a lot. Is it really possible to have that number? The answer lies in the equity market, to be more specific in systematic investment plans (SIPs) of equity mutual funds.

7 steps to make Rs 1 crore in the quickest time

Make money, SIP by sip – A SIP is a financial planning tool offered by mutual funds that allow you to invest small amounts at regular intervals over a long period. It also allows one to use the power of compounding to generate big returns in a portfolio.
In the equity market, the general approach of investing is to time the market whereby one tries to buy a stock or an index at a certain level and book profit when it has run up significantly. This approach often leads to common mistakes all investors, who tend to buy high (caused by the exuberance of a bull market) and sell low (due to the hopelessness caused by a bear market).
Start early – Starting your SIP early is the first condition of becoming a crorepati. One needs to start early. This will help the investor use the power of compounding. Especially over a long period, the difference between starting to invest early versus starting late can make a significant difference to your wealth.
What’s the next step? Investors should first chalk out their long-term financial goals to identify how much mutual fund investment one needs to make every month.
Talk to the right guy The next step is to decide on the right fund house and fund. They will be looking after your money every single day till you redeem and, therefore, they are like the coach on who you want to entrust your life’s savings.
Mix it up – SIPs are not just about pouring all the money into the equity market. The mark of a great portfolio is the distribution of risk and diversification across asset classes. One important element in mutual fund investing is the split in asset allocation between equity and debt.
Become the gardener – SIP investing is not about putting in some money and forgetting it, the way Warren Buffett will have you do it. It is more like being a gardener, who looks after his plants almost every day just to ensure weeds are not cropping up. An investor must, therefore, monitor the performance of a SIP.
Taking home the crore – If you have reached this point, you did well. But just investing is not enough, you have to take home all that moolah too. There’s a systematic way to do that, too. Systematic withdrawal plans (SWP) can help you redeem your investment when you hit the retirement buzzer.

Whatever be the case, the investment objective must remain sacrosanct and the investment plan must be made to accomplish the goal within the given time horizon and within a prudent risk framework.

Category: SIP

The Power of SIP

Hardly pinches your pocket

Magic of compounding

Investing just Rs 500 per month can result in the following scenarios

We don’t lose our sleep

Suitable for risk-averse investors

Continue to invest in case of unforeseen circumstances

Acquire confidence to invest more over some time as our portfolio grows

Easier to develop the habit of financial discipline

Claim tax benefits

Conclusion

Markets at all-time highs: Should you exit & re-enter at lower levels?

5 Things to know before investing in ELSS Mutual Fund

Does SIP in an ELSS Makes Sense?

What to start early: Investment or Insurance?

7 Things to do when your Mutual Funds are in Red

Sensex jumps 13000 – here are 5 mistakes to avoid

Five Bad Habits That Are Really Good while Investing

7 steps to make Rs 1 crore in the quickest time

Varanasi | Prayagraj | Raipur | Bhadohi | Siliguri

Customers buy a product but pay
for the experience

Useful Links

Quick Links

Important Links

Contact Us

Hardly pinches your pocket

Magic of compounding

Investing just Rs 500 per month can result in the following scenarios

We don’t lose our sleep

Suitable for risk-averse investors

Continue to invest in case of unforeseen circumstances

Acquire confidence to invest more over some time as our portfolio grows

Easier to develop the habit of financial discipline

Claim tax benefits

Conclusion

Varanasi | Prayagraj | Raipur | Bhadohi | Siliguri

Customers buy a product but pay for the experience

Useful Links

Quick Links

Important Links

Contact Us

Customers buy a product but pay
for the experience