10. Magic of Mutual Fund SIP

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Page 1 of 101Systematic Investment Plan | Mutual Fund | SIP | Best Presentation

2/5/2012http://www.tflguide.com/2011/02/systematic-investment-plan-mutual-fund-sip-best.html

Plan (SIP)

Systematic Investment Plan in Mutual Fund is commonly named SIP is really getting popular in India. Systematic Investment Plan is such a beautiful tool, which if used properly can help you to achieve all your financial goals. Some time back we wrote Do you really understand Systematic Investment Plan which is one of the most popular article of TFL, but readers requested that they want to read more about basics of Mutual Fund SIP. So here it is..

This Article will cover

Magic of SIP

What is Systematic Investment Plan (SIP)

Advantage & Benefit of Systematic Investment Plan

Best Systematic Investment Plan in India

Systematic Investment Plan Presentation with Facts & Figures

SIP Presentation with Examples & Analogies (I like this one )

Systematic Investment Plan (SIP) Calculator Must Use

IDFC Infra BondsGet tax deduction upto Rs. 20000. Issue closes by 25th Feb. Apply nowwww.idfcinfrabonds.com



What is Systematic Investment Plan?

We all have various financial obligations. Some of them like daily needs, school fees, etc involve the major outgo of your cash. Others like trip for your family or buying a fancy gizmo entails a one time payments for which money can be relatively easily collected. But for long term goals like retirement or purchasing a home require you to save and invest for many years. Yet irrespective of the amount involved and the time horizon, planning and investing money systematically and regularly enables you to sail through these obligations. A SIP could prove to be a simple and effective solution toward achieving these goals.

A SIP is a method of investing in mutual funds, by investing a fixed sum at a regular frequency, to buy units of a mutual fund schemes. It is quite similar to a recurring deposit of a bank or post office. For the convenience, an investor could start a SIP with as low as Rs 500; however this amount may differ from one fund house to other.

Benefits of Systematic Investment Plan

1) What is your equation to investments:

EARN->SPEND->SAVE OR EARN->SAVE->SPEND

The first is a wrong way of investing. You should be saving in a disciplined manner and SIP enables you to follow the second, which is the correct equation of investments.

2) Power of compounding: SIP make sure that you are not only benefited on your investment but you also get returns over the interest which in overall will result generating greater returns.

3) Easy, Flexibility and Liquidity: SIP is easy to start, manage and stop. It gives you flexibility to choose a desired scheme or to with draw in parts. And with conditions you have the money for contingency and emergency use.

4) You can also do SIP in ELSS (Equity Linked Saving Scheme) to save tax under section 80 C.

To check complete list of benefits you must read this article Benefits of Investing Systematically.

Best Systematic Investment Plans in India

Mutual Fund

3 Years

Investment 36000

5 Years

Investment 60000

10 Years

Investment 120000

12 Years

Investment 144000

Scheme Name % Amount % Amount % Amount % Amount

Birla Sunlife Equity Fund

26 51990 17 92033 29 570925 27 847695

DSP BR Equity Fund

30 55142 22 103852 32 656368 28 890730

Franklin India Blue Chip Fund

28 54785 20 98935 29 549491 27 860441

HDFC Equity Fund

39 61979 26 112626 34 721916 32 1142897

HDFC Top 200 34 57909 24 109045 33 706670



Fund

ICICI Prudential Growth Fund

25 51186 16 90158 25 437115 22 616589

Reliance Growth Fund

29 54014 21 100716 38 901404 35 1407815

Reliance Vision Fund

25 51789 17 91941 33 677154 31 1078457

SBI Magnum Global Fund

29 54249 16 88337 31 607379 26 793162

Sundaram Growth Fund

24 50576 15 88069 25 458342 22 617858

Tata Pure Equity Fund

27 52625 19 95385 29 554004 25 727228

*Calculations are done on 1st day of 2011 Monthly Investment of Rs 1000

I will again say Best comes after postmortem report you should see them as Top Systematic Investment Plans in Last 10 Years or just Systematic Investment Plan Comparison.

Calculations are done on Rs 1000 per month investment to keep things simple. If you would like to calculate for Rs 5000 or Rs 10000 you can multiply the amount by 5 or 10.

Systematic Investment Plan Presentation

If you like facts & figures check this SIP presentation by DSPBR Mutual Fund

Systematic investment plan



If you like stories & analogies check this presentation by TATA Mutual Fund

Mutual Fund Sip



Wasnt that simple, and this is the reason we call SIP a SIMPLE INVESTMENT PLAN.

Systematic Investment Plan Calculator

Important Points:

1. Figures are in Dollar($) but you can treat them in Rupees. 2. In Compounding Keep it Annually 3. Notice in last years how fast your assets grow. 4. Try 2 things to check impact of Power of Compounding:

Take interest 5%(Insurance Endowment Plans), 8%(your debt investments) & 12-15%(Diversified Equity Mutual Funds)

Take 15 Years & 30 years

You can Download Systematic Investment Presentation ppt

Simple Savings Calculator



Was this article helpful?? If you have some query feel free to ask.

Starting balance($):

Monthly Deposit ($):

Interest rate (%):

Compounded: Monthly

Number of years:

Calculate

Determine how much savings from a deposit.

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Bajaj Life Insurance100% premium paid invested from 6th year, 98% for the first 5 yearswww.bajajallianz.com/life-insurance

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Tagged as: Calculator, Mutual Fund, Presentation, SIP, Systematic Investment Plan

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{ 319 comments read them below or add one }

1 Sanjay Jain February 7, 2011 at 12:25 PM

Hi Hemant

Very nice article & second presentation is awesome.

Reply

2 Hemant Beniwal February 8, 2011 at 10:02 AM

Thanks Sanjay Are you gaining something from TFL??

Reply

3 Ashish February 7, 2011 at 8:22 PM

Is there a reference where one can compare SIP returns (like you have showed)? Dont remember seeing it in ValueResearch or other such sites.

Are top SIP going to be different than top fund in respective category?

Reply


Hi Ashish,

Your name... Your email address... Subscribe



You will not find SIP Return Comparison in any of the research sites. You can find SIP return for single fund for single period then you have to combine all of them. Its actually time consuming.

I dont believe in best SIP, best Mutual fund list is just top performing SIPs of past. (which does not guarantee they will outperform their pears in future)

Regarding your question yes top performing SIP can be different from top performing mutual fund.

Reply

5 ashish October 22, 2011 at 7:56 PM

i m new to sip pl. guide me how to start

Reply

6 Gurdial February 8, 2011 at 11:12 AM

Excellent work Hemant. I was really put off by MF returns after going through ValueResearch. Your article is really an eye opener as to how averaging through constant SIP can give stellar returns.

Keep these gems coming.

Reply


Gurdial Thanks for complement.

Yes thats the reason SIP is so powerful investment tool.

Have you shared this article with your friends may be we can open few more eyes before night

Reply

8 Munish February 8, 2011 at 1:30 PM



HI Hemant ,

Thanks for the article really a brief and wonderful presentation . I have a question? in SIP or mutual fund the money compounded monthly , quarterly or annually? Like we get in our banks. I dont have any idea on this.

Reply


Hi Munish,

Thanks for asking this superb question.

As far as I understand it is daily compounding but for calculation & comparison we take yearly compounding.

Reply

10 paritosh February 8, 2011 at 4:23 PM

HI HEMANT U R LIKE SACHIN TENDULKAR ! WHENEVR WE THINK THAT LAST ONE WAS YOUR BEST ARTICLE. U COME UP WITH EVEN BETTER NEXT TIME. KEEP IT UP N THANX FOR EDUCATING AND SAVING US. I WILL LIKE TO ASK ONE QUESTION. ENTRY TIME IN SIP DOES NOT MATTER BUT DOES EXIT TIME MATTERS? SUPPOSE AFTER 3-4 YEARS IF MARKET IS ON HIGH AND WE ARE GETTING GOOD RETURN SHOULD WE EXIT FROM THAT FUND,EVEN THOUGH WE DID NOT NEED MONEY AND PUT THE MONEY IN BALANCE FUND? JUST WANT YOUR EXPERT OPINION.

Reply

11 Hemant Beniwal February 9, 2011 at 1:49 PM

Hi Paritosh,

There is nothing called best be it particular mutual funds, my post or even my blog someone always holds a better thing next door.



Exiting from your investment should depend on your financial planning & asset allocation strategy. You can read about basics of asset allocation in the Behavioral Finance Guide.

Reply

12 Smart Singh February 8, 2011 at 8:14 PM

Hemant, Great article. However, Ill add a caveat. I have done extensive research on SIPs. And I realized that buy more at less argument for Rupee-Cost Averaging doesnt hold any water. A return comparison of RCA with Lumpsum would always tilt towards lumpsum in the long run, on an average. Equity markets return more than debt on an average. So the time you stay out of markets (through RCA) drags the average performance down for RCA. You could have a look at following links about dollar-cost averaging.

Links

The most important part about SIPs is the discipline they bring, and how they soothe the nerves of a jittery investor.

Reply


Hi Adheesh,

When we are talking about SIP we are talking about people who are earning regularly & they want to invest regularly we are not talking about people who are holding cash in their savings account & then doing SIP.

Even in case of STP period should not be more than 1 year. Hope we are on same page.

Reply

14 Smart Singh February 9, 2011 at 2:32 PM

Yeah, we are on the same page; the page with title SIPs are great

But professionals should be aware of the fact that Rupee Cost Averaging is not the



best feature of SIPs.

Reply


Hi Adheesh,

Great you counted RCA as a feature And I dont believe in BEST. We are on the same para.

Keep Sharing.

Reply

16 Jashanpreet Singh February 9, 2011 at 8:41 AM

Nice article..top job! Can you please advice which is the best SIP to invest according to current markets condition?

Thanks

Reply


Hey Jashanpreet,

As such there is no best SIP according to current market situation.

You can choose on fund in large cap & other in mid cap from above list & start your SIP.

Reply

18 ANIL KUMAR KAPILA May 31, 2011 at 6:54 PM

Hi Hemant If you include one and two years SIP returns also for the funds included in the list you will find that many of these funds have given negative or very low returns.On the other hand there are many other funds which have given better SIP returns in



the last one or two years.Will it not be better to junk some of these funds and opt for better performing funds which are not in this list?

Reply

19 srinivsu February 9, 2011 at 9:50 AM

sir, Happy for this good association.sir !In the abcence of entry load, low commissions to mutualfunds agents, how to find a good one ? thanks

Reply


Same here Srinivsu

How to find good SIP or good Advisor

Reply

21 Rayan Fernandes February 9, 2011 at 5:59 PM

Dear Hemanth,

Great article. Keep up tha good work.

Reply


Thanks Ryan,

I think its your first comment here keep sharing your views.

Reply

23 Nikhil Shah February 14, 2011 at 12:13 AM



Hi Hemant..

Good Article..Keep it up..

If you update Some Rolling chart In CAGR of HDFC TOP 200 Fund or Franklin Blue chip Fund 1Yrs ; 3rd Yrs ; 5th Yrs ; 9th Yrs ; 10th Yrs ;13 Yrs and 15Yrs..

it will give you very clear picture of Fund How is perform in Downside or upward side..

Thanks Nikhil Shah

Reply


Thanks Nikhil

I will definitely show rolling returns in some future article.

Reply

25 nandu February 14, 2011 at 11:48 AM

Hi Hemant..

I am very new to this area.. so want to know how to be a part of SIP from whre i hve to start. is it a monthly investment ????

Reply


Hi Nandu,

Good that you asked this question just adding few basic points. If you have any specific query feel free to ask.

Steps to start a SIP



1) Define the date: different mutual fund companies give lot of options but the common ones are 1st, 7th, 10th, 15th, and 20th of the month.

2) Ascertain your investment horizon and amount

3) Choose a scheme: shortcut is to consult a Financial Planner.

4) Fill in the SIP application form: there will be common application form and a SIP Auto Debit form (in case you wish the amount gets deducted from your account) or SIP registrations form (in case you bank or location is not servicing the auto debit facility and you want to give post dated cheques).

5) Documents: with the above mentioned form you also need to attach a copy of your KYC.

Reply

27 nandu February 14, 2011 at 12:16 PM

very much thnkss for ur advice .

Reply

28 S.SHIVASWAMY February 15, 2011 at 1:18 PM

Can anyone enlighten me on the methodology adopted for computing rate of return on SIP. Rate of return on are mentioned as .5654% p.m.7% Debt Fund and as .8735% on 11% Equity fund is mentioned in one of the FPSB workbook.

Reply


Hi Shivaswamy,

Can you share exactly what you have read in workbook.

Reply

30 hyderalis February 15, 2011 at 3:51 PM



Thanks Hemant,

New to your site & this investing field. Both the PPT are awesome. I was thinking of investing my money but dont know where to go & find. I was reading economic times & found this SIPs article which attracts me to think, so i was just surfing on net to find more of this & finally found your site which is really helpful. My age is 23 & im very determine to invest in mutual funds which is a perfect go-through to understand the market scenario. I also wrote an email to ET to guide me into this sips. But from now onwards ill be heading to your site to get all the basic info on stocks, mfs, etc.

Thanks.

Reply


Thanks Hyder for sharing your views. Just one advice dont look for direct stocks for investments invest through mutual funds.(see I have saved your thousands of rupees if you follow this)

Reply

32 hyderalis February 16, 2011 at 12:23 PM

Yes Hemant, Id like to know more about SIPs can you do a follow up article on how? what? where? documents etc..need for opening SIPs account.

Reply


Sure give me some time. Also read one of my comments I have talked about steps.

Reply

34 Mani February 16, 2011 at 1:29 PM

Hi Hemant,



The article was too good and all the more I liked was in the 2nd ppt, wherein youve said in one of the examples that, despite student getting low marks in Geography, but due to her consistent good marks in her previous tests, managed to round off well on an overall basis and made to the next level.

Eventhough Ive learnt these so called minute things when I was in teens, but never implemented it when we stepped into the real world.. Now, I regret more for not starting an early SIPs..

Anyways, thanks once again for refreshing our memories and to showing us that lessons like these once learned will def managed to hold us in a good stead thru out our life

Mani

PS: BTW, Im not receiving an Email alert of whatever new articles are being posted in this website Is that possible for you to check whether my email is registered in your group list. Thanks

Reply


Thanks Mani

I have checked you have just registered

Reply

36 arman February 21, 2011 at 7:51 PM

My age is 27 years. I have a surplus of Rs. 1.5 Lacs & would like to make my first entry into Stock Market through Mutual Fund SIP of say Rs. 5000/-. Since presently the money is lying in Savings A/C earning 3.5%, whats the way ahead? How about STP? But I dont have any knowledge how STP works & whether its advisableKindly suggest the best parking option from where I can deposit into Mutual Fund SIP. Thanks.

Reply


Hi Arman,



STP is similar to SIP with just one difference in case of SIP amount moves out of your bank & in case of STP its first parked in a debt fund & then transferred to equity fund.

You can choose funds from the list in article.

Reply

38 arman February 23, 2011 at 7:10 AM

Thanks for the Heads Up. I would like to know a few more things

1. Whether I have to invest in the same fund house for STP to work, & 2. Whats the tax treatment of any gains from such Debt Fund at the time of transfer to SIP? 3. Are Debt Funds & Liquid Funds the same? Actually I know they are notWhich would be a better option in my case?

Thanks.

Reply


Hi Arman,

Find my inline Reply:

1. Whether I have to invest in the same fund house for STP to work, & > Yes 2. Whats the tax treatment of any gains from such Debt Fund at the time of transfer to SIP? > You can opt for dividend reinvestment option in any Liquid Plus or Ultra Short Term Fund 3. Are Debt Funds & Liquid Funds the same? Actually I know they are notWhich would be a better option in my case? > Liquid Funds are part of Debt Fund you can choose funds from Liquid Plus or Ultra Short Term Fund

Reply

40 arman February 25, 2011 at 7:40 AM



Thanks for all the enlightenment. One more query regarding SIP & LTCG, actually need confirmation: I know in case of ELSS, 3 year Lock-in is for each SIP/Installment. Is it the same way for calculating 1 year period for LTCG. If you can explain with an example, it would be great. Actually I want to know how LTCG is calculated in case of a Mutual Fund SIP. Thanks.

Reply


Hi Arman,

Yes it works this way what actually you are thinking.

First in first out(FIFO) Ex if you have invested Rs 1000 & got some units 1st jan 2011(25 units) & 1st feb 2011(20 units) on 15th Jan 2012 you sell all units: LTCG will be applied on 25 Units(completed 1 year) Taxfree STCG will be applied in 20 Units(less than 1 year) 15% tax on gains if any

Reply

42 arman February 25, 2011 at 5:58 PM

Thanks a lot for the example. Great Man!

Reply

43 Sukhpal Singh February 23, 2011 at 8:31 PM

I wish to start a SIP of Rs 2000 PM for a period of 3-5 years. Please advise me the best equity funds or others.

Reply




Hi Sukhpal,

Best fund is just illusion you can select any 2 fund from the list mentioned in the article. (Have one large & one mid cap)

Reply

45 Ronak Shah March 1, 2011 at 12:58 PM

Hello Mr. Hemant

it is really great to get such collective and meaningfull info regarding MF SIP here. sir my age is 26 and i want to invest 10000RS per month through SIP. please suggest some good alotment with best schems.

Regards Ronak Shah

Reply

46 Hemant Beniwal March 1, 2011 at 11:31 PM

Hi Raunak,

You can choose any 4 funds from the list 2 large cap & 2 mid cap.

Reply

47 vikas March 1, 2011 at 8:48 PM

hii am a small investor.iwant to invest in SIP.which sip will best to me if i invest rs 1000 every month for 10 years.plz mention why this plan is best for me.

Reply


Hi Vikas,

Best fund is just a post mortem report you can choose any 2 funds from the above list.



Reply

49 Pankaj Malhan March 2, 2011 at 12:06 PM

Dear Hemant, I have invested a good amount in four equity funds in the last 4 years by SIP.I do not have any more money to invest at this stage. How you think I can take advantage of market volatility in the future, as once I have exhausted all my funds, I do not have SIP to take advantage of the future market declines. In other words, what should be the strategy after the SIP is stopped, should I just stay invested, or can I some how gain some extra returns. I have invested in all four balanced funds so asset allocation is already being done by the fund manager to keep 65: 35 ratio all the time.

Reply


Hi Pankaj,

Hold it inactivity is the friend of long term investor.

Reply

51 Rahul March 5, 2011 at 2:48 PM

I am also a new person having idea to invest in Share Market. I found good discussion on SIP plans, thanks to all of you.

Can anybody suggest me current SIP plan to invest for 5 to 7 years. Once I could get any new & concrete information about SIP plan, will definately share.

Reply


Hi Rahul,

As you dont have any idea about SIPs my suggestion is start with 1-2 funds.(small amt)



Keep learning & at some later stage make a proper portfolio linked to your goals.

Reply

53 vishal jaiswal March 17, 2011 at 12:27 PM

Hi Hemant

Great man.. Thanks so much I was going to invest Samridhi Plus(LIC), but as per your article, It is worth Thanks.. Thanks .. Thanks

Currently I have SIPs of Reliance Tax saver Growth -1000 pm, SBI Magnum -500 pm, HDFC Tax Saver Growth- 1000 PM DSW -1000 PM, DSP BR- 1000 pm, Canara Bank 1000 PM

can you please advise , if they all are good or I have to swich from any of these.

Thanks Vishal

Reply


Hi Vishal,

You have just mentioned names of AMCs & not funds.

Reply

55 SWAMY April 11, 2011 at 12:32 PM

Dear Hemanth Sir,

Today only i visited this great informative site for investors. All articles are very informative and excellent. Thanks for your valuable analysis and information.

I am 33 years old. I can invest monthly 5000, can you please suggest best investment options



based on my age. I dont know how to invest in SIPs. Please guide me.

Thanking you in advance. Swamy.K

Reply

56 Hemant Beniwal April 11, 2011 at 9:59 PM

Hi Swamy,

You can start with HDFC Top 200 & DSP BR Equity once you learn basics than start some serious investments.

Reply

57 Sisir April 11, 2011 at 11:39 PM

Hi, Thanks a lot for the valuable information.I want to start investment in SIP 5000 p/m.What is large & mid cap.can you mention few names. What do you mean by serious investment?

regards sisir

Reply

58 Hemant Beniwal April 12, 2011 at 9:33 AM

Hi Sisir,

In large cap you can start with HDFC Top 200 & in Mid Cap go for DSP BR Small & Mid Cap Fund.

I wrote serious investment as he is 33 & already lost some good years for saving. Or in other words time is not with him.

Reply



59 Sisir April 13, 2011 at 9:33 PM

Hi Hemant,

Thanks for the info.Anyway i am also 33.Can you please suggest how to invest at this stage?

Regards Sisir

Reply


Hi Sisir,

I already told you in my last message

You can also open PPF ac. with post office or SBI bank.

Reply

61 Jaswant Singh April 15, 2011 at 11:28 AM

i want to invest 500 per month in SIP scheme can you tell me about return and time some things

Reply


Hi Jaswant,

I am not sure what actually you want to ask.

Reply

63 Vikas kumar April 19, 2011 at 12:28 AM



hii, thanks for this nice article sir. I am a student of MBA. I want to start SIP by my savings of part time job (tuitions). I want to start with rs.1000 for 3 yrs Is it possible?

Reply


Hi Vikas,

Dont invest in equities if your horizon is only 3 years. Go for balanced funds or MIPs.

Reply

65 Navnath Junghare April 19, 2011 at 11:10 PM

HiHemant,

Nice article! Im 27 yr old bachlor with monthly income of 35k.Till now I havnt done any investment. So to start up plz tell me where & how much should I invest,Or should I consult advisor?

Thank You Navnath

Reply


Hi Navanath,

Hiring an advisor will be good choice but before that I will suggest to learn basics of this game. Start small amount in SIP so that you get some taste of equities also open PPF A/c its a no brainier & best debt investment.

Reply

67 Navnath Junghare May 4, 2011 at 7:00 AM

Hemant,



Thanks for the reply. For starting Im considering HDFC Top 200 & DSP BR Equity Fund from the list you mentioned in this article. Does these two funds good & enough? & for how many years I should invest in these funds?

Regards, Navnath

Reply

68 Hemant Beniwal May 5, 2011 at 8:11 AM

Hi Navnath,

Its good to hear that you are following our suggestion but dont follow them blindly as need of 2 people will never be same so how solution can be same. But as far these funds are concerned they are exceptional performers in the past. They are enough or not will depend on size of your goals and investment amount but as you have mentioned its just your beginning you can stick to these funds. Time horizon of your investment should decide that for how long you should invest in any mutual fund you can consider withdrawing it or changing your strategy when you are 4-5 year from your goal.

Reply

69 Navnath Junghare May 26, 2011 at 8:47 AM

Hi Hemant,

For debt, Im considering investing in FMP for 2 years(How much return I should expect?) & in HDFC Taxsaver fund. As I already opted for two equity funds, is it necessary to invest in more than one ELSS fund for returns? Also instead of opening PPF account Im considering increasing my EPF contribution.

Let me know your view please.

Thanks & Regards, Navnath

Reply

70 Nitish Kumar April 24, 2011 at 1:22 PM



Hi, Thanks for the great information. Just a small query, if ones horizon is long term like about 10 to 15 yrs, then what type of funds should one go for. Also does it make more sense to keep switching funds to maximize returns.

Reply


Hi Natish,

For such a long horizon you should stick to good diversified equity funds. Dont switch a lot it will negative impact on your returns.

Reply

72 haamim April 24, 2011 at 1:23 PM

Well, the article was indeed an eye opener..n the presentation was a motivating one.. Gee Thankx..i m indeed thinking of goin for a SIP!!!

Reply


Great Haamim

Reply

74 Ankit April 24, 2011 at 5:45 PM

Hi Hemant,

Nice elaborative article,it helps in understanding basics!I have question related to ULIP.

I am 25yrs old bechalor. I started with a ULIP plan in Jan-2008,A.P of 15k.It covers Life insurance of 3Lac.I have already crossed the mandatory period of premium pay which is 3years.Do you suggest me to continue with policy?If yes,shall I continue to pay A.P or should keep policy as is?



Reply


Hi Aniket,

My suggestion will be to surrender this policy but check surrender charge & tax implication before doing the same.

Reply

76 VINAY April 28, 2011 at 6:56 PM

I FOUD IT VERY INTERESTING AND CAN NOT EXPECT MORE INFORMATION. EVEN A LAYMAN CAN UNDERSTAND IT EASILY. THANX FOR SUCH INFORMATION.

Reply

77 Hemant Beniwal May 1, 2011 at 9:25 PM

Thanks vinay for appreciating our effort.

Reply

78 Sumit Kumar May 2, 2011 at 8:08 PM

Hi Hemant

I came to know of this recently and I find it quite easy to understand. Thank you for your your kind effort for the Novice user like me. From your articles I came to know that a Term Plan with Equity SIP and PPF is the best combination. Currently I am 23 yr old and working in Railways. So I am already attached with NPS. My monthly income is nearly 32K. 1) I want to know if I take Equity with SIP in quarterly mode how long will I have to invest money in that particular fund. Is it that I have to invest only for 4 times (Quarterly SIP) in a year and then in the next financial year I can invest in some other equity fund. I am planning to invest about 40k per year. 2) In the quarterly mode is it that I can invest at any time within the 3 month period.



Thanks Sumit

Reply


Hi Sumit,

Its good to know that you are seriously taking your investment at this young age. I can assure you if you keep thing on track you will build huge wealth before retirement. You have raised a good point regarding quarterly SIP most of the investor thinks that it can be done only monthly. Theoretically you can do this way that you invest 4 installments this year in fund & next year in some different pay but practically this strategy will not have much benefit. My suggestion is to start with a diversified portfolio of 3-4 funds. Regarding dates of SIP that will be fixed & you have to invest on same date every quarter.

Reply

80 Sumit May 6, 2011 at 8:44 PM

Hi Hemant Thanks for the information.

Reply

81 Girish B May 4, 2011 at 11:20 AM

Hi Hemant

It is a very valuable information you have provided about SIP. However I have a query. Is it worth to go for a SIP in a fund where the NAV price is very high . say hdfc equity where nav is around Rs 200? Does it matter on the number of units which I am getting while investing in SIP

Reply




Hi Giresh,

This is 3rd time that I have received this query I am writing one article on same will publish it today or tomorrow.

Reply

83 A. Misra May 16, 2011 at 8:19 PM

Sir Is any SIP granted any I.Tax benefit to the investor?

Reply

84 Hemant Beniwal June 18, 2011 at 12:57 PM

Hi A. Mishra,

You can start it in ELSS Fund.

Reply

85 Mayank Gupta May 19, 2011 at 12:27 AM

SIP in Mutual funds is like a snail but in a long run create your wealth with the power of compunding

Reply


Good thought Mayank

Reply

87 prashant chaudhary May 27, 2011 at 3:11 PM

Dear hemant, no doubt your article is very very valuable for beginners



please clarify, should i invest per month 2000/- via SIP in 1-2 mutual funds stated by you in the article or invest quarterly/half yearly equivlent amount , which one will be more benificial. i am a salaried employee.

Reply


Thanks Prashant

You can start in any of the 2 funds mentioned in above list.

Go for monthly option your income is monthly most of your expenses are monthly so why not have investments on monthly basis.

Reply

89 kamalesh thapa May 28, 2011 at 11:34 AM

i recently read this article & i guess i am one of those guys who is gonna get a great help from this as i was looking for investment options.certainly this help us to understand each & every small or big details about SIP minimize our risks. . thanks man

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Thanks Kamlesh Must share it with your friends.

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91 ANIL KUMAR KAPILA May 31, 2011 at 7:14 PM

Hi Hemant In the table of best SIPs only the name of the scheme is given.If in the description it is also mentioned whether the scheme is large cap, mid cap, small cap or flexi cap, it will help the investor in making a selection.

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Great Suggestion

Next time I will try to implement it.

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93 ajmal June 4, 2011 at 3:01 PM

Hi Hemant, Thanks a lot to share such an insight into the subject of SIP. I am new to this, always wanted to invest through SIPhave fnally taken a plunge, have started with Reliance Equity Fund & Reliance Gold Savingsalthough i plan to get few more Mutual Funds into my kitty, but there is always a question that comes to my mind how much time should one invest or should i say(since am a salaried individual) how often should one review the SIPs?? regards

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Hi Ajmal,

You can start sips in 4-5 funds & keep reviewing it on half-yearly basis. But must start learning about investments & other personal finance topics.

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95 Swamy June 4, 2011 at 5:40 PM

Dear Sir,

First many thanks to you for how you are educating people who are interested in their future financial plan. Great Sir. Can you please tell me, till date i dont have any financial plans, by reading this article, interested in invest in SIP. How and where can I start, I dont have any demat account. Can I pay online monthly to any SIP?

Thanking you, Swamy.K



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Hi Swamy, There is no requirement of Demat for mutual fund investments try to find out an advisor in your locality or reach out nearest branch of private sector bank. They will assist you in filling your form & may also guide you. Make sure they dont sell you any investment related policy.

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97 kaushal June 6, 2011 at 1:07 AM

Hi Hemant, Very very informative,useful, and interesting article.Pl keep on writing and sharing such types of information with us.Also may I request you ,to mail few more companys mutual funds(SIPs) whose past performance were attractive and future is bright, and also are suitable for investment as per your experience and idea. Thanks!! Kaushal

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Hi Kaushal, I have already shared a long list I think you can start SIP in 3-4 funds of your choice.

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99 Parag Sane June 9, 2011 at 11:11 PM

I want to start investing in SIPs starting with Rs 5000 per month and taking it to 10000 per month.

Looking at a horizon of 5 years which fund will give me max returns.

I have medium risk appetite.



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100 ANIL KUMAR KAPILA June 10, 2011 at 9:50 AM

Hi Parag Since you are investing in mutual funds for the first time and you have a medium risk appetite and medium time horizon, you can start your SIPs in one or two balanced funds.

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101 Manoj June 21, 2011 at 4:20 PM

Hi Hemant,

I am 26 yrs old and I have started investing Rs. 1000 each monthly SIP in these 3 diversified funds : HDFC TOP 200 (Large cap category) DSP-BR small n midcap (Small n Midcap category) Fidelity Equity fund (Multicap category)

I want you to tell me how is my portfolio..

My second question is that I have also started investing Rs. 4000 ELSS SIP in HDFC tax saver. If from next financial year, ELSS is not considered as tax saving then what will be the option for me to invest in equities for tax saving and if equities will not be considered as tax saving then should I invest some amount in PPF and increase my SIP in the above 3 diversified funds or have one more diversified fund in my portfolio?

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Hi Manoj,

Your fund selection is good continue it. Regarding DTC lets wait but continue your investment ELSS.

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103 Vijay July 1, 2011 at 4:13 PM



Hi Hemant:

Id like to start investment in SIP. Before that I made some preliminary calculations: 1) Calculated my present monthly expenses (~20K) 2) Projected that figure 15 years hence, for the future value of monthly expenses (~63K) using 8% Inflation Rate 3) To earn that amount per month, I calculated the Corpus amount (Rs. 1,26,88,683) required which when invested at 6% Interest Rate gives me 63K per month. 4) To achieve that Corpus amount , I calculated how much amount I have to invest monthly (in SIP) at an investment rate of 15%. I got an amount of Rs. 19K approx. a) Am I correct in my assumptions and calculations? b) I plan to invest this amount equally in 4 SIP Plans HDFC Top 200, Franklin Blue Chip, DSR Black Rock & one more SIP. Id like to hear your comments and suggestions regarding my plan. c) I plan to invest for 15 years as Im 44 now and am planning for my retirement fund. d) At present I invest in ICICI Lifetime Pension II Plan (Rs10K per year), MetLife Ultimate Option A (60K Per Year), apart from PPF (12K Per year)

Need your valuable advice.

Regards

Vijay

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104 Manoj July 18, 2011 at 1:44 PM

Hello Mr. Vijay,

I would like to inform you that we have read enough articles on ULIP insurance n pension policies n came to know that those policies are not enough to meet our retirement goals. So if you have decided to go with mutual fund SIPs then its a good decision. Proper fund selection is also an important part to enter in equity. So all the above funds that Hemant suggested are very good.. One thing you need to look at is that you need to have proper diversification of funds.. large cap, multi cap and small n mid cap fund..So if you go with HDFC top 200 as large cap fund then in multi cap category go with reliance equity opportunities fund and/or fidelity equity fund and in small n mid cap category go with DSP-br small n midcap fund or IDFC premier equity.. remember that 30-40% of investment in small n mid cap category is important as these funds will give very good returns in long run.It is also important to have proper company diversification. And considering your age I would also suggest you to have a balanced fund like HDFC Prudence fund which will control your portfolio when the market is down.



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105 Manoj July 4, 2011 at 10:59 AM

Hello Hemant,

My dad is a retired person n is 63..He told me that he wants to invest Rs. 1000 SIP equity per month from his pension which he thinks he has in excess for around 5 yrs or more and is happy to get any returns better that govt schemes. I told him that SIP investment for 5 yrs is perhaps not enough as many of the financial advisers do not suggest to invest in SIP for just 5 yrs..I told him to invest for at least 8 yrs..Then he said ok.. I also told him that you should not be worried too much with the market fluctuations..He said ok for that as well.. I suggested him a balanced fund i.e HDFC Prudence fund whose track record has been very good over the yrs.

I want your opinion on this Hemant.. Shall he proceed further with the HDFC Prudence fund or you can suggest any other fund?

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106 playboy July 13, 2011 at 1:58 PM

Hi Hemanth,

I am impressed with your articles. But I do have some concern regd the selection of mutual fund or equity suggested by you.

I do agree that SIP brings discipline, rupee cost averaging, interest compounding etc. But the main thing is choosing the right fund.

If the fund is not performing great, it does not make sense to invest in SIP even for 10 to 15 years.

I could see that no where you are mentioning that. Please correct me if I am wrong, I understood from your articles that you ask to go for SIP irrespective of fund (i.e how it performs) as nothing is best for you. But I think that is not right procedure. The same thing for equity, not all shares of the companies will go up even if we keep for long term (10 to 15 years) if the company is not performing good.

Thanks, Playboy

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107 ANIL KUMAR KAPILA July 13, 2011 at 8:01 PM

Hi Playboy I think you have not understood the article correctly.Below the table of SIPs prepared by Hemant he has clearly mentioned that the table is meant for comparison only based on the past performance of the funds.Hemant is right when he says that no fund is best because no fund remains best for ever.There are always ups and downs in the performance of a fund throughout its life cycle.The fund which may appear to be best today may not remain best tomorrow.Moreover the selection of a fund is not decided solely by its present or past performance.While selecting funds for SIPs the presence of other funds in the portfolio has also to be considered.Recommendation for a fund for SIP can not be given in isolation.That is where the role of a financial planner comes.Moreover it has been proved that over a long period of time even a fund which may appear to be giving average returns has the potential of giving decent returns.

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108 gautam singhania July 16, 2011 at 5:02 PM

hi great article. it really helps us new investors get a good picture. i am 28 yrs and want to invest rs 6000 per month in a sip. looking at hdfc mid cap oppurtunity fund . also i am a bit confused as do new funds like this one having low nav of 15 rs is better choice than hdfc top 200 fund in long tern of 20-25 yrs as investment is fixed and i will be getting lesser units in top 200 as nav 215 rs than mid cap as nav 16rs .

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Hi Gautam Since you are a new investor, it is better for you to invest in two or three good large cap or large and midcap funds.NAV does not play any role in the selection of funds.Only the long term performance of the fund should be considered.

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110 Manoj July 18, 2011 at 1:25 PM

Hello Gautham,



As Anil n Hemant said NAV high or low does not matter..What matters is the performance of the fund over the years under good times n tough times.. Many financial experts say that for a person in his portfolio..there should be minimum 2 funds n maximum 4-5 funds n proper diversification of funds like multi cap, small n mid cap and large cap is required.HDFC top 200 is a large cap fund and HDFC midcap opportunities is a mid cap fund.. I would suggest you to have one of these 2 funds because both these funds are managed by same fund manager. So if you go with HDFC mid cap opportunities..it is an excellent mid cap oriented fund and in large n multi cap category of funds you can have fidelity equty fund and reliance equity opportunities fund..This should complete your fund portfolio and in long run you will easily achieve your goals..

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111 uday July 17, 2011 at 2:50 AM

Hi,

I have recently started two SIPs, Reliance Growth Fund and HDFC TOP 200, both Rs.5000 each and planning to continue for 15 years depending upon the future performance. I would like to have one more. Kindly suggest the best one.

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112 ANIL KUMAR KAPILA July 17, 2011 at 10:57 AM

Hi Uday If you read the posts carefully you will get the answer of your question.Hemant has already mentioned that best comes only after post mortem report. So please invest the additional amount in one good large cap fund based on present and past performance and keep on monitoring the future performance of the funds in which you invest.

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113 Manoj July 18, 2011 at 10:59 AM

Hello Uday,

Reliance Growth fund is an OK fund and HDFC Top 200 is a very good fund..Both are large cap funds..Most of the financial experts say that one needs to have proper diversification and 30-40% of your investment should be in small n midcap funds as well.. So I would like to suggest you to have a small n midcap fund like DSP-BR small n midcap fund or IDFC Premier equity.. Both of these funds have been best performers under this category.. This will



complete your fund portfolio.. Also re think your strategy with reliance growth fund..Continue with it till it performs well or else switch to reliance equity opportunities fund which has been a magnificent fund in the last 5 years.

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114 CA Karan Batra July 19, 2011 at 5:30 PM

SIP is one category of investment which every individual should be investing in.

Try to invest atleast 10% of your monthly salary in SIP

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115 Hemant Mittal July 21, 2011 at 12:33 PM

HI Hemant,

I am 30 yrs of age and looking for investments in short and long terms and so choose SIP. Your article has motivated me that what I have choosen is good. However I wanted to know if step taken by me is good enough. I have started SIP from this year (March 2011) and invested Rs 5000/- in 4 different funds as adviced by ICICI MF Advisor. I have currently opened it for 3 years but I am planning to extend it for 10 years. I wanted to know from you if the funds selection is good enough and how much do you project its value will be after 3 and 10 years ? If you feel any of the fund is not good what you suggest me to do?

1. IDFC Premier Equity Fund Plan A Growth : Rs. 2000/month 2. ICICI Prudential Focused Bluechip Equity Fund Retail Growth : Rs. 1000/month. 3. ICICI Prudential Discovery Fund- Growth: Rs. 1000/month. 4. ICICI Prudential Dynamic Plan Growth : Rs. 1000/month.

Looking ahead for your advice.

Thanks Hemant Mittal

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Hi Hemant Mittal



Firstly I would like to point out that a person who is connected with a particular fund house can not be called an advisor. His job is to increase the business of the fund house. You should take the advice of an independent financial advisor. All the funds you have taken are good but it is advisable not to have more than one fund from the same fund house.For the sake of diversification and safety you should retain only one fund from ICICI Prudential fund house and replace the two funds with similar funds of other fund houses. Investment in equity mutual funds is done for long term goals of more than five ears.No body can predict short term return of three years.

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117 Manoj July 22, 2011 at 11:11 AM

Hello Mr. Mittal,

Your top 3 funds are very good. Even though your fund exposure is mostly in ICICI funds, the 2 funds i.e focussed bluechip is a large cap fund and discovery fund is a midcap-multicap combo fund. Both these funds invest your money in different diversified ways. So you can stick to these 2 funds. IDFC Premier equity is excellent midcap fund as well. Only change you need to make in your portfolio is exit from Dynamic plan n invest in another large cap fund i.e HDFC Top 200 fund. This will give proper balance to your portfolio and also provides you with proper company diversification.

Now the question here is you need to distribute your money in a balanced way in these 4 funds. Many of the financial experts say that 30 40% exposure should be in midcap and small caps and above 50 % should be in large caps. But you have around 60% exposure in mid and small caps which is a bit risky even though your time horizon is for 10 years. so I suggest you to distribute your money in this way :

1) IDFC Premier equity 2000 /- 2) ICICI Prudential Focused Bluechip 1000 /- 3) ICICI Prudential Discovery Fund 500 /- 4) HDFC Top 200 1500 /-

This completes your portfolio diversification very well.. Now coming to your 2nd question about returns. It is not possible to predict returns but we can certainly make assumptions. So if you are investing Rs. 5000 for 10 years then..

With an Avg of 12 % returns you will get Rs. 11,61,695 /- With an Avg of 15 % returns you will get Rs. 13, 93,286 /-

So Mr. Mittal, this just my point of view..You need to take final decision. If you want to



look at some other funds.. you can select from the above mentioned list by Hemant Sir.

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Hi Manoj and Mr Mittal You can also see the latest post on this subject in which some guidelines have been given for selecting equity mutual funds.

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119 Shamshad.M.M July 23, 2011 at 6:50 PM

Hai,

I can invest 7000 monthly through SIP and I can be an aggressive investor,so can you just give me a rough figure to make my port folio ? please let me know how much amount i have to invest in each caps ..

thanks.

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Hi Shamshad I think you should invest Rs 2000/- each in large cap and large cap and midcap and midcap and Rs 1000/- in multicap. Do not forget to track your funds.

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Hi Anil bhai,

So can i short list my portfolio as ;

1 DSP BlackRock Top 100 Equity 2000/Month 2 HDFC Top 200 2000/ Month



3 IDFC Premier Equity Plan A 2000 /Month 4 Reliance Equity Opportunities Ret 1000 / Month

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Hi Shamshad You have selected very good funds for your portfolio.Start your SIPs in these funds immediately and stay invested for a long time.No not bother for short term ups and downs.Good luck!

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123 Shamshad.M.M July 24, 2011 at 11:22 AM

sure Anil bhai.my investment period will be 15-20 + years .as iam going to marry on Januarymy goals will be depending upon that

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124 Munish Singh July 24, 2011 at 11:11 AM

Hi ! everyone. These are my investment folio let me know is there any modification required.

HDFC TOP 200 ->> 2000/monthly SIP. HDFC Equity ->> 2000/monthly SIP. ICICI DYMANIC (G) ->> 2000/monthly SIP. ICICI Pru Focused Blue Chip Equity (G) ->> 2000/monthly SIP. HDFC Prudence >> Planning to start a SIP of 1000 IDFC Premier Equity Plan A (G) ->> Planning to start a SIP of 1000

Regards, Munish

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Hi Munish All funds in your portfolio are very good.The only issue is that it has not been properly diversified as you have more than one fund from two fund houses in your portfolio.This increases your risk.Normally the portfolio should have only one fund from each one house.

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Hi Munish ,

As Anil bhai said ,you can diversify your port folio by changing some funds;

- Instead of HDFC Equity you can go for Reliance Equity Opportunities Ret , - Instead of one ICICI fund you can go for DSP BlackRock Top 100 Equity. Other good funds are -Franklin India Bluechip,Fidelity India Growth,Birla SL Dividend Yield Plus and UTI Dividend Yield and i think minimum monthly payment for IDFC Premier Equity Plan A (G) is 2000.

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127 munish singh July 25, 2011 at 9:08 AM

Mr. Anil & Mr. Shamshad

Thanks a lot , for correcting me Now I understand what your concern is and where Iam wrong. Really a wonderful experience of using TFL where i get the right direction to invest.

Reagrds, Munish K. Singh

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128 Shamshad.M.M July 25, 2011 at 10:53 AM

Hai Munish ,

Credit goes to Hemant Bhai,he is the man behind TFL.without any doubt i can say that iam getting all these knowledge from him and Anil.

Keep visiting TFL and share it with your friends.



Regards, Shamshad.M.M

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Hi Munish It is good to know that you have understood what to do.The key is to remain away from people who are miss selling.

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130 munish singh July 26, 2011 at 3:35 PM

I am completely agreed with you.

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Thanks! Munish

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132 kaushal July 27, 2011 at 6:09 PM

Hiii Hemant, Thanks for writing useful articles about various investment schemes.I want to invest money in SIPs for 5 to 10 yrs,and have short listed few ones ,which are :HDFC Top 200 Fund, Birla Sunlife Equity Fund ,DSP BR Equity Fund,SBI Magnum Global Fund,Franklin India Blue Chip Fund.In your suggestion are these SIPs are safe and beneficial ? Pl also suggest that I want to invest in Gold ETF,how will it be this investment ? Thanks in advance for your valuable advice !! Kaushal Sharma

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Hi Kaushal Please read the post Best Mutual Fund For SIP.This will help you in constructing your portfolio.

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Hii Anil Actually this article is not clear to me and I want to know in nutshell. Pl suggest me to construct the portfolio. Thanks !! Kaushal Sharma

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Hi Kaushal The portfolio of equity mutual funds is constructed to meet your long term goals such as kids education, retirement etc.You must have a corpus in mind to achieve your goals.Depending on the corpus required you have to decide the amount which you have to invest every month.Then you have to invest that amount in four or five funds which will form your portfolio.Select one large cap fund, one large cap and midcap fund, one multicap fund and one midcap and small cap fund from the categories given.Invest around 70% of the amount in large cap and large cap and midcap fund and the balance in the other funds.Start your SIPs and remain invested as long as you can.Do not bother about short time ups and downs in your portfolio.

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Hii Anil Thanks for your valuable suggestions.I am Ex soldier aged 37 yrs and get monthly pension about 10000 Rs PM, and get 35000Rs PM from salary.I have invested money in RD, MIS & FDs but that gives very less profit, off course have highest security. Now I want to invest around 400000 lacs RS ,which I had received from my last service.Pl suggest me the areas of investment,particularly with specific name of SIPs and also name(s) of term plans of insurance and amount and period of plan as per your



suggestion.Also pl suggest me that how will be the Gold ETF for investment purpose. Thanks !! Kaushal Sharma

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Hi Kaushal It is not desirable to make any lump sum investment in equity mutual funds.You can divide the lump sum amount available with you in monthly installments and invest it over a period of around one year in monthly SIPs.Up to 10% of your investment you can have in gold.

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138 Hemant Beniwal July 28, 2011 at 8:41 AM

Hi Anil/Kaushal, SIP is a great way to invest but that doesnt mean one should not invest lumpsum in equity markets. My suggestion to Kaushal is he can invest part of amount as lumpsum & rest through Systematic transfer plan. (6-12 months)

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Hi Hemant Thanks!

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140 munish singh July 28, 2011 at 9:19 AM

Thanks Hemant,

even this thought comes in my mind to invest lumsum



amount but as in your article it is mentioned that it wont be a good decision. So can i also do the same. One more thing

1. Like for example i started SIP in ICICI fund with folio no. of 1233456/78 . After one year I got a good incentive or some return from other investement . So would it be a good idea to invest those returns in that SIP folio lumsum.

Regards, munish k singh

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Hi Munish As for as folio number is concerned normally you should have only one folio number of a fund house and you should do all your investments in the same folio number.It does not matter whether you invest lump sum or through SIP.

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142 munish singh July 28, 2011 at 2:17 PM

oh! gr8888 . I was really confused . Now every thing is clear.

143 David August 3, 2011 at 1:01 PM

Hi Hemant,

Very very good article

Could you please advise which SIPs should I invest in which would give me some good returns

Regards,



David

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144 ANIL KUMAR KAPILA August 3, 2011 at 9:14 PM

Hi David Please read the post Best Mutual Fund for SIP for answer.

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145 playboy August 4, 2011 at 8:39 AM

Hi David,

I think you have read other posts as well. You need to have realistic financial goal in mind along with the period of time to achieve that goal. It helps you to plan to achieve the goal and the amount you need to invest regularly.

Hemanth suggested few mutual funds which are good to invest in sip method. Please choose among them and do not worry about markets ups and downs and invest your money to achive your financial goal. Please keep in mind that you should have long term goal in order to invest in Equity and also be realistic, i.e expect approx 12% to 15% returns per annum in equity.

The reason I am saying this is that your query says that Some good returns. Hence I am suggesting you to have finanical goal in place. If you are already having that, then it is very good.

Happy investing to achieve your goals.

Regards, PB.

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146 David August 4, 2011 at 11:58 AM

Hi PB,

I am fairly new in the SIP so thanks for the advise. I plan on investing in long term basis (10 to 15 yrs if applicable) and have the following options in mind



HDFC TOP 200 = RS 5000/month DSP BR Equity= RS 5000 / month HDFC Equity= RS 5000 / month

Please advise if the above selections are appropriate. Also will it be available for an NRI.

Regards, David

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Hi David As mentioned in the post Best Mutual Fund for SIP your portfolio should have one large cap fund, one large and midcap fund,one multi cap fund and one mid and small cap fund.Although both the funds of HDFC mutual fund selected by you are very good, it is better if you select each fund of different fund house for better diversification and reducing risk.

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148 sudheesh nair August 13, 2011 at 3:33 PM

hi, pls. advice me on the investment funds available to invest Rs.10,000/- every month in a SIP. investment period will be between 10 to 15 yrs and will be purely equity based.

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Hi Sudheesh Read the post Best Mutual Fund For SIP.

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150 Saurabh August 16, 2011 at 10:54 AM

Hi Hemant,



i m 22 yrs old my income is 22k permonth this month i had invest in 1) HDFC top 200 1000/- mnth 2) IDFC premier equty 1000/- mnth 3) HDFC tax saver 1000/- mnth 4) DSP balckrock balanced 500/- mnth

Please guide me on this,is this okay , and please suggest me some more plans for investments and i would like to invest more 5k per month but gradualy , & i need to save 60000 more under 80c plz guide me on dis.. I had already invest in dsp balckrock natural res & reliace reg saving 10000/- respectivly lumpsum in yr 2009 so shall i continue with dis or can i go for redumption option? please guide me for my financial planing for future Waiting for ur reply, thanks

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Hi Saurabh It is good to know that you have started investing in mutual funds and you want to invest Rs5000/- per month more. However it is important to know whether you are investing to meet some long term goal or just investing by randomly picking up some funds.

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152 Saurabh August 17, 2011 at 8:27 AM

Hi Anil, thanks for your early reply Yes, the amout which i have invested in all above funds(which i mentioned above coment) is for long term like 5 yrs, and does that invesment financialy sound? Please let me know this also if not then I will roll back my funds. And next 5000 i would like to invest for short term so guide me on that Thanks Waiting for next reply

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Hi Saurabh



The definition of short term and long term is different for different people.For the purpose of investment a time horizon of less than three years can be considered short term.In the short term we can see a lot of volatility in the market.Hence it is advisable to invest only in debt for short term.Time period of three to five years can be considered as medium term.For medium term you can consider investing in hybrid funds.For a time horizon of more than five years you can consider investing in pure equity funds.

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154 Saurav Dasgupta August 17, 2011 at 2:42 PM

Nice artice, some of my doubts are now cleared about SIPs. will read all the comments once reaching home i will first get my KYC done.. by the time can you seggest me how to get a good financial planner.

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155 Hemant Beniwal August 17, 2011 at 7:26 PM

Hi Saurav,

Check this http://www.tflguide.com/2010/12/how-to-choose-your-financial-advisor.html

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156 Sunita August 20, 2011 at 11:29 AM

Dear Sir, I want to invest Rs. 1,00,000/- for future of my baby please advice best investment plan

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Hi Sunita Instead of looking for some investment plan you should construct a portfolio of three or four good equity mutual funds and invest the amount in them.



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158 Shikha August 20, 2011 at 3:52 PM

Wow..!! indeed a great help to beginnersI am 25 year old salaried person. Though, planning for investment one year later, but i hope i didnt lose much of the time. I m so delighted to start with my investment plans..!! Many thanks to Hemant and Anil. Presentations are awesome!! this one is my fav blog from now. will visit it often. I hav already told every single gud thing about SIP to my parents and wud spread the news to my friends too to go through ur site. Once again thank you so much

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You are welcome Shikha.It is good to know that you are starting with your investment plans.Best of luck.

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hi Anil, I have one doubt regarding PE ratio, does it really help to consider PE ratio while investing in MFs. Please can you clarify

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Hi Shikha If you are planning to start investment in mutual funds to meet your long term goals please read the post Best Mutual Fund For SIP.This will help you to construct your portfolio.Just follow the core and satellite approach.The funds selected for each category are based on the present and past performance.You do not have to consider any other factor like PE ratio etc.

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Thank you Anil, i ve gone through that web page too. Must say that helped me lot to make my portfolio, yea i m following core satellite approach and playing on conservative side, keeping 65-70% in core. Made a list of all contact address, where i could approach on the decided fund houses. I guess it will take time to start upon all the MFs investment plans i ve made. I ll do that one by one. For the beginning I ve decided on four diff fund houses, two large caps and one large and mid cap, and one multicap. Will fill in 1-2 tax saver MF too. Lets c how it works out. Please feel free to provide your valuable suggestions that would add on my future plans and make it lot better..!!

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Hi Shikha You are doing fine.You can also check contact address of registrar and transfer agents of different fund houses.Most of the fund houses are serviced by CAMS and KARVY.You should not forget to mention your email ID on the application forms.Once your emailID is registered with registrar and transfer agent you will automatically get your account statements via email whenever any transaction takes place.Moreover you can also get your portfolio statements via email.

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164 Shikha September 17, 2011 at 1:07 PM

thanks Anil, i have invested 30% of my monthly income in SIPs. Of this amount, 64% I have invested in DSP black rock and Franklin blue chip. The rest (36%) i have invested in canara robeco tax saver and fidelity tax saver. Will you please suggest me that do i need to increase this 30%?? Because earlier i had also planned for investing in IDFC premier and HDFC top 100, but then dropped the idea, as i am new to investments. please reply

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165 ANIL KUMAR KAPILA September 17, 2011 at 1:58



PM

Hi Shikha One must try to save as much as one can. If you can save more than 30% of your income then it is very good. Since you are new to investments I would suggest you to have proper asset allocation first. As you are 25 years old you should have around 25% in debt and 75% in equity. If you have already invested in debt as per your asset allocation then you can consider investing your additional savings in diversified equity mutual funds.

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166 Shikha September 17, 2011 at 6:16 PM

thanks anil, i guess that 1:4 ratio of debt:equity is for total savings and not total income!! am i right?

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167 ANIL KUMAR KAPILA September 17, 2011 at 6:47 PM

Hi Shikha Yes this is the allocation of your assets which you create from your savings. Here debt is needed to meet your short term requirements and equity is meant for long term wealth creation. I have not included property and gold which can be your other assets. After having a portfolio of diversified equity mutual funds exposure to gold can be considered later on. Gold should not form more than 10% of your portfolio.

168 Saumya August 26, 2011 at 9:26 PM

Sir

Thanks for publishing such articles. Indeed your articles are very informative.



I am 22 year old salaried executive and a novice in this field. I want to know that SIP is to be done on monthly basis or it can be done on quarterly, half-yearly or yearly basis as well. Though I save some amount per month but I have to keep it for emergency. But I can invest money that I will get as bonus or incentive (but that will be twice or thrice in an year) or surplus out of emergency fund.

Or I may start 2 monthly SIP Rs 1,500 each and invest more as and when more money is available. So please advice, which way can I do. Can I do any one of the two ways or only one of two is possible.

Secondly, SIP is done for a fix amount say Rs 2000 and the unit price (NAV) is Rs 240 so you will get 8 units, what is about balance Rs 80, how it is account for.

Thanks

Saumya

Reply

169 ANIL KUMAR KAPILA August 27, 2011 at 9:00 AM

Hi Saumya Since you get your salary every month it makes sense to save something every month and go for a monthly SIP although other options are also available.To begin with you can start monthly SIPs in large cap and large and midcap funds. You can add multicap and midcap and small cap funds to your portfolio later on whenever you have more funds available. You can add to your existing funds any time by way of small lump sum investments. It is not necessary that NAV or the allotted units have to be in whole numbers.

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170 Shirish August 30, 2011 at 2:22 PM

Hi Hemant,

Thanks a ton for all ur articles. I am 30 yrs old. I am working in a SW industry. I am new to this kind of investments. My current savings/investments are in the form of LIC Policies and PF. LIC Policies: 55k per annum (after 20 yrs I am going to get a sum of around 9 lacs) PF: 70k per annum.

I dont think its a good investment from a long term perpespective.



I need some suggestions on investing the money to have a good returns for my childerens and at my retirement.

Regards, Shirish G.

Reply


Hi Shirish It is good to know that you have now decided to invest to meet your long term goals.Please read the post -Best Mutual Fund For SIP and start investing in equity mutual funds.

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172 scout221ha September 6, 2011 at 1:04 PM

Hi Anil, Im a student with about 1000-2000Rs to spare every month. Im looking at a long term investment of about 10 years. From what ive gathered SIP seems like the best option. I heard the word midcap & largecap mentioned in some of the previous comments, i dont really know what that means. I would greatly appreciate some advice as i am new to investing and a complete illiterate on the subject.

Reply


Hi Scout221ha Words largecap and midcap are derived from market capitalisation. 2972 stocks are traded on BSE. 78 largest companies account for about 70% of total market cap, 216 mid-sized companies account for the next 20% of total market cap, 2678 smallest companies account for the bottom 10% of total market cap. Equity mutual funds with more than 80% of assets in large cap companies are called large-cap funds. Equity mutual funds with 60 to 80% of assets in large cap companies are called Large & midcap funds. These types of funds are synonymous with stability and low volatility. Hence you can select one or two funds of these categories for your investments.



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174 Satish Laxne September 7, 2011 at 2:14 PM

hai, Im interasted (SIP) plans so please sagest me best co.& plans. replay me. thanks.

Reply


Hi Satish Please read the post- Best Mutual Fund For SIP.

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176 Kirubakaran September 7, 2011 at 5:16 PM

Dear Sir, Thank you very much for your valuable article. My monthly salery is Rs.18000/pm. Yearly 8000 pay in LIC Bema Gold Scheme. Mothly Rs.2000 invest in HDFC Top 200 and DSP BR Top 100 Equity -Growth Scheme. Pls kindly help to me this is enouf for my future retirement statge or can i increase amount in Mutual fund. Pls kindly help to me. am new investor in Mutual fund.

Awaiting your reply sir

Reply


Hi Kirubakaran The funds selected by you are good. If you can save more then you can always increase your investments in these funds.

Reply



178 Pratima September 13, 2011 at 4:39 PM

Hi Hemant,

Whenever I say my husband that I want to start SIP he tells me to go for tax saving SIP, I have heard lot about SIPs and financial goals we can achieve through that I am really interested in starting SIP but always confused between tax saving SIPs and normal ones can you please guide

Reply


Hi Pratima Tax saving can not be the only reason for starting SIPs in mutual funds. Moreover from next year you are not going to get any tax rebates on your investments in tax saving mutual funds and your money in these funds is going to be locked for three years. If the objective of your savings is to meet your long term goals then investment in equity mutual funds through SIP route is the best approach.

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180 Ashwini September 13, 2011 at 5:31 PM

Thanks for providing information in simple way.

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181 Nikhilesh September 17, 2011 at 11:31 PM

Hello Hemant, I hav Rs. 50000. want to invest for 2 years. please suggest where could I? Also I want to invest Rs.2000 Per Month on SIP. So please suggest which SIP should i look forward too.

Regards | Nikhilesh |

Reply



182 ANIL KUMAR KAPILA September 18, 2011 at 11:53 AM

Hi Nikhilesh Your investment horizon of two years is not suitable for investment in mutual funds. You can consider investing in bank deposits. For investment in equity mutual funds you have to remain invested for a minimum of five years.

Reply

183 Nikhilesh September 18, 2011 at 5:01 PM

What about SIP?

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Hi Nikhilesh You have not mentioned any investment horizon. If it is around five years you can invest in a balanced fund like HDFC Balanced Fund.

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185 mithilesh kumar September 20, 2011 at 7:26 PM

hi.. 1st off all heartily congratulation to hemant,anil. dear sir, i am 28 year old.my monthly income is 20k. i want to invest 4000-5000 Rs. per month. my plan is 2000 Rs per month in ppf, 1000 Rs. in hdfc top 200, 1000 Rs. in hdfc equity fund, 500 Rs. in DSP BR equity fund, 500 Rs. in Reliance growth fund. for long term.its suitable or not? another question is here sir i am going for long term ie 10-15 year for these SIP then any lose. please guide me. kind regard



mithilesh kumar

Reply

186 ANIL KUMAR KAPILA September 24, 2011 at 8:35 AM

Hi Mithilesh For investing Rs 3000/- per month so many funds are not required. You can consider investing in these two funds. 1 ICICI Prudential Focused Bluechip Equity 2 HDFC Midcap Opportunities.

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187 jitendra singh September 22, 2011 at 3:14 PM

Sir, Really very good article. Thanks

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188 Yogesh September 24, 2011 at 8:11 AM

Hi, Firstly I would like to thanks for this nice article. I also want to invest in SIP but I have one query regarding the date of each month. Which date of the month is better to choose while investing in SIP. Is it better to invest around 25th of each month just before expiry because normally market fall at that time ? Please advise. Thanks in advance.

Reply


Hi Yogesh When your investment horizon is long and you invest through monthly SIP, the date of SIP is not important. Nobody can time the market.



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190 badri prasad deshmukh September 25, 2011 at 9:10 PM

Sir, Please guide me, i am polcy holder BSLI platinum Premier life term 10 pay 10. but i am 1st primium paid 08 march 2010. next primium due on march 2011. some problem occuer due to primium not paid by me. pl suggest me to be continue to same plan and what are procedure to be continue and also suggest for what are document to be required for contineue.

Please advise. Thanks in advance.

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10. Magic of Mutual Fund SIP

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