SIPs for Defense

LET YOUR SIPS ROLL, -Systematic Investment plan


The markets have been choppy lately for past four months and are reflecting the drunken movements of a ship in turbulent waters. As always happens in similar times, we have started fielding the familiar questions from worried customers – Is the India story dead? ; Should we get out of the mutual funds now? ; You said I’ll get good returns – see them now; I’m not even getting the FD returns on my investments; or worse – Get me out of these funds before its too late even if I have to pay tax and exit load on them! This is the same story every time. A large number of investors get into equity mutual funds when the markets are doing well with the avowed aim of investing ‘for the long term’. But the moment there is some volatility, their ‘long term’ perspective becomes ‘short term’ in no time ...
Stopping of SIPs-

Stopping of SIPs

It is a common phenomenon that most of the investors tend to stop their SIPs in mutual funds (and maybe even redeem all the units of some or all of their funds) when markets are on the highs out of fear that they are accumulating units at a high rate and markets can go down any time. Similarly, when the markets go down, they stop the SIPs (and maybe redeem units again) thinking that markets will go down much more and they will start only when the markets have settled or ‘bottomed out’. The article below addresses this behavioural gap of large number of people which prevents them from creating wealth and thus, meeting their life-time financial goals. (Please enable your ‘Display Images’ mode in the browser). ____________________________________ No one can ‘time’ the market and if anyone can, then it will be a bigger business than Apple, Google or Amazon ...
Never Ignore Stock

Never Ignore Stock Markets

At the start of every New Year, there are a series of articles focused on which asset class is likely to do well for the next 12 months. There are two fundamental problems with such a discussion: It limits the time frame of the discussion to the next 12 months. This is tantamount to projecting what your child will grow up to be like based on what he ate for breakfast this morning; There is a false assumption that, though you may be guided into the right asset class by your private client wealth advisor, you will be sold the correct specific investment as opposed to the instrument which pays the wealth advisor the highest commission. This is tantamount to saying that because your child goes to school he actually learns something useful on how to deal with life. Stocks are risky, but can make you money Since January 1981, ...

Diversification of Your Investments- Don’t Put All Your Eggs In One Basket

We frequently come across individuals who are very finance-savvy but have taken a fancy to one particular asset-class and are totally convinced that it is the best one to sail them through their life. This bias is seen mostly in real-estate investments and in equity investments(stocks or shares, as they are variously called). Unmindful of the danger it poses to their long-term goals, they continue to invest all their investible suplus in their favoured avenue without caring about one of the Golden Rules of Investment - Diversification of assets. What is diversification? Diversification means spreading your investments over a number of investment avenues. Why do we need to diversify our investments? Why should we not put it all in only one type of investment which we think is the best? Let’s look at the example below. A man wants to sell eggs to buyers in the city. He will carry ...

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