Skip to main content

Mutual Fund SIPs - Ideal to reach our financial targets

Buy Gold Mutual Funds

Invest Mutual Funds Online

Download Mutual Fund Application Forms

Call 0 94 8300 8300 (India)


We get our income every month. Therefore, it becomes convenient to save every month. By investing our savings on a regular basis without letting it sit idle, we can give ourselves the opportunity to earn for the longest period. Also, the longer our money stays invested, the greater the power of compounding that works for us.


These two aspects, a regular and disciplined investment approach with time on its side, make systematic investment plans (SIPs) ideal vehicles to reach one's financial goals.


For example, you start a monthly SIP of Rs 10,000. Let's assume two scenarios of annual growth rates between 8% and 15%. If you start early, after a 30-year period, your corpus would be between Rs 1.5 crore and Rs 7 crore. However, the same plan over a five-year period would give you between Rs 7.4 lakh and close to Rs 9 lakh (see Start early to save more).


Investing systematically every month also gives us another important benefit: How often have you seen 'unexpected' expenses taking away your savings? If, instead, your money is invested, it will not be available for spending.


One can start an SIP in an equity and/or gold fund (for higher annual returns of around 15%) for long-term goals or in a debt/liquid fund (for safer annual returns of around 8%) for short- to medium term goals.


SIP in a volatile asset class like equity/gold also allows you to benefit from 'Rupee Cost Averaging' wherein a fixed contribution per month fetches you more units at lower NAVs and lesser units at higher NAVs, thereby reducing your overall average cost of acquisition.

While starting an SIP in an equity fund, it is essential to ensure that the scheme has a proven track record of outperforming the broader markets.


SIP is essentially a mode of investing in which the returns depend on the quality of the underlying scheme. For instance, if you had a monthly SIP of Rs 10,000 on the 1st of every month for a consistently performing equity fund launched about seven years ago, and had invested an equal amount in the BSE sensex around the same time, the results would hugely differ


SIP in a debt/liquid fund, if properly planned, can deliver tax-free returns and can also be used by individuals and businesses for short term goals like payment of taxes, vacations, annual bonuses, loan repayments, school-college fee, asset acquisitions, etc.


Before starting an SIP, you must consult a qualified financial planner for risk profiling, an assessment of your needs, preparation of the financial plan and to obtain advice on the suitability of schemes to start SIPs.

 

Happy Investing!!

 

We can help. Call 0 94 8300 8300 (India)

 

Leave your comment with mail ID and we will answer them

                        OR

You can write back to us at prajnacapital [at] gmail [dot] com

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

Invest Mutual Funds Online

Transact Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Fund Application Forms

Best Performing Mutual Funds

    1. Largecap Funds        Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds     Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds    Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds             Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds              Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Gold Mutual Funds             Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

Gold: What Can Trigger the Inevitable?

A stronger dollar or rising interest rates could derail the epic yellow metal mania   Before you sell that last piece of jewellery, keep in mind that the gold price will not go up indefinitely. There are number of reasons why it might crash. If you're over weighted in gold or commodities, the warning is the same: A stronger dollar, strengthening US economy or rising interest rates could derail the epic yellow metal mania. Who knows? Congress could even reach an agreement to clear up its balance sheet and pay down its debt. What are the chances of any of this happening? It's beyond the limits of my minuscule, clouded crystal ball, which is about the size of a pin-head.   Nevertheless, you should prepare your portfolio for any number of eventualities, which can be easily accomplished with exchange-traded funds. Gold is troublesome in my book because it really isn't an investment. It's a reserve currency of sorts that's heavily traded by institutional investor...
Read more

What is Statutory Liquidity Ratio - SLR?

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 What is Statutory Liquidity Ratio - SLR ?   Last week, the RBI cut statutory liquidity ratio ( SLR ) by half a percentage point to 22.5%, effective June 14. By this, the central bank intends to release additional money into the banking system. SLR is the amount of funds that every commercial bank should have either through its holdings in government approved bonds and securities, gold or a combination of these assets. This is another way of ensuring enough liquidity for each bank before they lend to customers. By reducing SLR, the RBI released another half a percentage point of commercial banks' total deposits (in banking parlance, total demand and time liabilities that include FDs, savings and current accounts) to be free ...
Read more

7 Things You Should Look for in a Financial Planner

Recently, a new breed of professionals has emerged who are making financial plans for everyone and are not restricting themselves to investment planning. A financial plan includes planning for your taxes, retirement, kids' education and marriage, buying a home, estate planning or any other goals you may have. This new breed of professionals, known as financial planners, writes a plan for you with all your goals specifically laid down and then provides you with a road map on how to achieve these goals. They always give you a holistic account of all your finances, taking into account all your assets and liabilities, besides taking care of all the risks associated with you and your family and also the assets owned by you. These financial planners will first collect all the data related to your finances and the goals you have for future. These goals may be anything ranging from buying a home, to planning for your child's education to going on a vacation. After this exercise of d...
Read more

How to invest in the Stock Markets?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   One of the trickiest things in life is making a decision when to enter and exit the stock market. Investing in the stock markets is all about timing. Yet the timing is never right .Stocks never seem to reach the optimum price one wants .When share prices are expected to fall down to abysmal levels they rise and are soon out of one’s price range. When share prices are at low levels one keeps waiting for them to hit rock bottom and when they rise one has missed the bus. Stock markets are all about keeping one’s emotions in check. One must stand the true test of time.   What are interest rate sensitive stocks? When interest rates rise consumers who purchase expensive items such as cars on credit might postpone them. Discretionary spending is cut .Customers might postpon...
Read more

Market Pre-open session - How It works and Its benefits

   With an intention to reduce volatility in various scrips at the opening of the markets, and to arrive at the ideal opening price of a scrip, the exchanges have introduced a call auction process in the pre-open session from October 18.    The pre-open session is a new innovation to arrive at the ideal opening price of a scrip for the current trading session. The session intends to reduce volatility in the beginning of a day. Under this new arrangement, an exchange will collect orders for the first few minutes of this session. On the basis of orders received, it will arrive at the opening price and match the tradable orders to that price. The remaining orders will be moved to the normal trading session.    The call auction process will be initially introduced for scrips forming part of Nifty and Sensex, and trading in other scrips and F&O contracts will only begin at 9:15 am when normal market trading begins. Orders not will get traded during the order entry period in the pre-...
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