Skip to main content

Mutual Fund is SIP good in volatile markets


   A systematic investment plan (SIP) is an option where you invest a fixed amount in a mutual fund at regular intervals. It could be monthly or quarterly. The minimum investment amount in most mutual funds is Rs 1,000 per month. The money may be transferred through ECS with standing instructions also. Because it's systematic, a SIP helps you plan for your long-term goals along with the short-term ones.


   A SIP is a disciplined investment plan and helps reduce susceptibility to market fluctuations. It is a powerful tool that helps you preserve capital and also translates into substantial wealth creation in the long run.


   The tenure may be different under different schemes. Usually, you should stay invested for a long enough period, so as to maximise your returns.


   In the case of a SIP, you will be investing irrespective of the market conditions. This ensures that cost averaging comes into play and allows you to benefit from volatility. Of late, the stock markets have been volatile. It is very difficult for individual investors to decide on when to invest - time their investments.


   When you buy more units at a lower price (when the market falls) and lesser number of units at a higher price (when the market goes up), you average out your investment costs. Suppose a monthly SIP is for Rs 10,000 and the fund's net asset value (NAV) is Rs 10. This will result in 1,000 units being credited to you. However, next month, on account of volatile market conditions, if the fund's NAV falls to Rs 5, you will get 2,000 units. This will lower your average purchase cost. A SIP helps you buy more when the stock market is falling and less when it is rising.


   A SIP is an excellent tool for investors to build wealth. There is no need for a one-time lump sum investment. A regular investment pattern helps build discipline in investors. You can go for a SIP according to your goal - marriage of children, their education needs or your retirement corpus. The 'rupee cost averaging' makes the market fluctuations work for you, and reduces the risk of investing all your money just before a market downturn.


   Rupee cost averaging works best with investments that tend to fluctuate in price regularly. So a SIP can be most effective when used in buying equity-based funds. The NAVs of these funds can vary widely. Through rupee cost averaging a SIP can make this volatility work for your benefit. However, rupee cost averaging may not work well if the market keeps on an uptrend.


   SIPs can be used by investors of all ages. You should never discontinue a SIP in weak market conditions or when the markets fall sharply, as this will defeat the very purpose of investing in a SIP. An investor who does not have a large amount to invest in one go and one who does not want to take much risk should go for a SIP. This will enable him to invest periodically to suit his budget.


   A SIP offers flexibility and helps you identify funds that suit your risk-returns profile. In case of a SIP, the asset allocation keeps pace with your changing risk-returns profile. Besides, investing this way offers liquidity whenever required.

 

-----------------------------------------------------------------

 

Also, know how to buy mutual funds online:

 

Invest in DSP BlackRock Mutual Funds Online

 

Invest in Reliance Mutual Funds Online

 

Invest in HDFC Mutual Funds Online

 

Invest in Sundaram Mutual Funds Online

 

Invest in Birla Sunlife Mutual Funds Online

 

Invest in UTI Mutual Funds Online

  

Invest in SBI Mutual Funds Online

 

Invest in Edelweiss Mutual Funds Online

 

Invest in IDFC Mutual Funds Online

 

Popular posts from this blog

How to generate a UAN Online

Best SIP Funds Online   In order to make Employees' Provident Fund (EPF) accounts portable, the Employees' Provident Fund Organisation (EPFO) had launched the facility of Universal Account Number (UAN ) in 2014. Having a UAN is now mandatory if you have an EPF account and are contributing to it. So far, you got this number from your employer and every time you changed jobs, you had to furnish this number to the new employer.  However, in order to make it easier for you to get a UAN , and without your employer's intervention, the EPFO now allows you to go online and generate a UAN on your own. This facility can be used by freshers, or new employees, who are joining the workforce as well as by employees who have older EPF accounts but do not have a UAN as yet. As a new employee, you can simply generate a UAN and provide the number to your employer at the time of joining, when you need to fill up forms for your EPF contribution. As per a circula...
Read more

Reliance Regular Savings Fund - Debt Option

Reliance Regular Savings Fund - Invest Online     The scheme aims to generate optimal returns consistent with moderate levels of risk. It will invest atleast 65 per cent of its assets in debt instruments with maturity of more than 1 year and the rest in money market instruments (including cash or call money and reverse repo) and debentures with maturity of less than 1 year. The exposure in government securities will generally not exceed 50 percent of the assets. The fund uses a mix of relatively low portfolio duration with active investments in higher-yielding corporate bonds. It does not take aggressive duration calls but tries to improve returns by cherry-picking corporate bonds. This is reflected in the fund's returns matching the category and benchmark for five years - at 8.4 per cent - but lagging behind the category during a raging bull market in bonds in the last one year. The fund has been a consistent but not chart-topping performer in the income category. Despite its ...
Read more

Am you Required to E-file Tax Return?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...
Read more

IIFL NCDs

Buy Gold Mutual Funds Invest Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Call 0 94 8300 8300 (India) IIFL NCDs IIF's six-year unsecured NCD 2012 Risk-wary investors should stay away from this issue, and even, risk-taking ones should think twice It is a public issue of unsecured redeemable non-convertible debentures ( NCDs ) by India Infoline Finance ( IIF ), an unlisted company, which is a 98.9 per cent subsidiary of India Infoline, a listed company. The issue seeks to raise Rs 250 crore with an option to retain over-subscription up to Rs 250 crore taking the total potential issue amount to Rs 500 crore. It will be open for public subscription from September 5 to September 18 with a minimum application size of Rs 5,000 in the form of five NCDs of face value Rs 1,000, TENURE & RATES: IIF will redeem the NCDs at the end of six years, and investors wanting out before six years will be able to sell the...
Read more

Gifts to relatives will not attract tax

Tax Saving Mutual Funds Online Current open Infra Bond Application form Gifts are always special to the recipient and it would be extra-special if there is no tax payable on these. The taxman believes so, too. In the provision introduced in Section 56 of the Income Tax Act, if any sum of money is received gratis by an individual or Hindu Undivided Family (HUF) during any year, it shall not be taxable if from a relative. The law has already defined the term 'relative' and HUF. However a case that came up before the Income Tax Tribunal shows that some clarifications were still needed. Background The law also exempts gifts during special occasions like marriage of an individual or under a will or by way of inheritance and even in contemplation of death of the payer. Money received as grants or loans from educational institutions/universities, charitable trusts or similar institutions is also exempt. The term relative has been defined in the law to include spo...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now