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Thread: SIP - the best route for investment in MF

  1. #1
    Junior Member dinu is on a distinguished road
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    Default SIP - the best route for investment in MF

    If any one is afraid of taking risk in the volatile share market but still want to test the waters, mutual funds are the best way to invest with. Further, if some one is hesitant after watching red faced investors who invested heavily when market was on top around 20K and notionally under huge loss as on date, SIP is the best route.
    To put it in simple, SIP (Systematic Investment Plan) is like recurring deposit but with no definite returns. But impact of notional loss is minimum when market falls specifically when compared to one time investment, because cost of investment gets averaged as the investment of fixed amount is made on monthly basis. With the introduction of direct debit or ECS facility, the task of investment has been made easy.
    However, unlike other financial instruments this one is bit trickier and there must be a minimum horizon of atleast three years. One needs lots of patience. Not many govt employees know that investment made in ELSS funds (Equity Linked Saving Schemes) is eligible for tax exemption under section 80C (Within one lakh rupees limit). Even those who know might end up making one time investment rather than SIP.
    Subject is too huge to discuss on the forum. But those who have good financial advisers in their friends group, can think on this option. Happy investing.

  2. #2
    Junior Member mk1969 is on a distinguished road
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    Hi dinu
    You are right. But it is unfortunate that all employees are not interested in Mutual Funds and SIPs. I am holding 07 SIPs of 1000 each PM for the last two years. Although the unit value come down due to the recent melting of Share Market the average price is still very low. But iam accumulating units in my funds which will be benefited once the market returns to its glory. It is also advisable to invest and balance your funds. Some good funds i may suggest are DSP ML T.I.G.E.R, Reliance Equity, Reliance Vision, HDFC Equity, Birla Midcap, Reliance Regular Savings, Tata Infrastructure, ICICI Infrastructure, DWS Investment Opportunity etc... The minmum duration one should select may be three to four years. No short time benefit in Mutual Funds.

  3. #3
    Junior Member dinu is on a distinguished road
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    thanx 4 the response. I will never take risk of telling an investor where to invest. It is better left to the discretion of the concerned.

  4. #4
    Senior Member G.Ramdas is on a distinguished road
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    Investment advisors,brokers and agents always give big lectures on the advantages of SIP and the investors are guided by their advice.What the investors do not see is the commission the advsors/agents get for every (monthly)investment you make.The entry load is 2.5% which is applicable for every investment. But if you purchase the units 'directly' from the Mutual Fund offices or their servicing centres like CAMS you save the entry load of 2.5%. This facility is also available for online booking/payment in respect of some M.Fs

  5. #5
    Senior Member G.Ramdas is on a distinguished road
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    This refers to post #1 about the advantages of SIP over onetime investment.
    With the stock markets in shambles, things have changed a lot. In fact the SIP investors have become worst sufferers when compared with regular or one time investors. A recent report in the BUsiness Line of 29.3.09 brings out the following facts
    "Contrary to general belief, investors through systematic investment plans (SIP) in mutual fund schemes seem to have suffered more compared with the non-SIP investment mode, owing to erratic movements in the stock markets over the past three years.

    Investments through SIP in SBI Magnum Taxgain over three years would have diminished by 36 per cent by February as against a 21 per cent negative return for a non-SIP investor, while SIP investors in Kotak Tax Saver have suffered a loss of 40 per cent against 22 per cent for a non-SIP investor (see table), according to Value Research data.


    After a steep climb to 21,000 levels in early 2008, the bellwether Sensex began falling sharply in January 2008 and crashed to 8,891 points on February 27. Though the loss incurred by a scheme may vary according to its tenure, the erratic markets have resulted in poor returns for many SIP investors over the past three years.

    While SIP investors are bound by the commitment to invest on a particular day, a non-SIP investor can invest any time when the market is down so that he gets more units. "


    However the silverlining is that with the markets showing signs of an early pick up, the SIP investors will be benefitted as it may turn out to be costly for investors who substantially delay their investments.

    GR

  6. #6
    Junior Member akmalabbas is on a distinguished road
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    Post SIP investement;

    It was really very useful information about SIP, it is really good to know that we can avail rebate if invested in SIP. Unfortunately our babu's who are deputed to guide the employees doesn't know about it.
    I had made investment in kotak but due to no proper guidelines,
    I was misguided and did not mentioned this in my income tax return.
    Now it seems when filing refund I will submit the details of my SIP investment.
    Thanks for information.
    Keep Guiding.

  7. #7
    Senior Member ramanrao60 is on a distinguished road
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    Default stocks

    the best bet to make money out of stocks is to buy when markets are going down and sell when they are rising

    but most people do the opposite hence loose the money

    but what to buy is the moot question-
    stocks with strong fundamentals,blue chips ,index components are the best bets,as they are always in the forefront of any recovery of the markets at any time

    but lots of dynamic factors have to be taken into account as many of yesterdays blue chips like HLL etc are no longer market leaders today

  8. #8
    Member amit2301 is on a distinguished road
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    Nice lines from Guru Granth Sahib:"Meri aukaat se badhkar mujhe kuchh na dena mere malik".......kyonki......"Zarurat se zyada roshni bhi insaan ko andha bana deti hai"

  9. #9
    Junior Member baburaoreshika@gmail.com is on a distinguished road
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    Lightbulb if u are a government servent then read this

    u get 2 da in every year and each one is a sum of rs 1000 (remember now u are without this and also managing ur needs) so whenever the da announcement is coming start to invest in a sip

    it is simple

    beleave me

    i am doing this

    see the things only after five years

    u will have a nice amount of units

    if at that time the nav is increased 1 point then

    each and every unit in your hand will give u a rupee

    suppose u have 6000 units then u will get 6000 rs easily

    try this

    patience tolarance and is the sip lovers policy

    2000 per year in 2 new sips every year,start doing this from this april 2012 to 2017 but do not forget this

    u have to wait for 5 years in each sip that is a minimum of 60 thousands in 10 mfs


    see the results after 2018

    if the market is ok then defenately u will be paid more than the rd interest in the post office

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