Target Investment Plan or TIP is an ideal target based investment plan. In TIP, Investors can customize investments in conformity with their financial goals. This investment plan works with the end in mind. It works to create a certain corpus within a stipulated time and investment amount. It works quintessentially like SIP. However, the amount invested every month may differ. Generally, more units are purchased when market conditions are bad and vice versa. These units can be uncashed when the financial objective is met.
The above-shown graph is a comparative representation of the performance of three asset classes. i.e., equity (BSE 100 index), Fixed Deposits and Gold. As it is evident from the above graph equity is the highest return generator in the last 20 years. It has delivered more than twice the returns as compared to FD and gold. Yes, Equity is a risky asset class and there may be several down-hills in equity markets. 2002 dot com bubble and the subprime crisis of 2008 are 2 good examples. However, it has been a proven fact that in the successive aftermath of the crisis, markets bounce back. Indian stocks markets recovered 98% during the period of 2003 to 2004. And post- 2008 crisis, the market again gained 98% and has delivered 246% since then.
Mutual funds are regulated in India by SEBI (Securities and Exchange Board of India). Mutual Funds essentially comprises of an AMC (Asset Management Company). AMC has professional experts who Invest the investors’ money in various debt and equity instruments.
A lot of investing community is not tracking investments on a regular basis. As a result, a section of the invested funds start to underperforms and become a drag on the entire portfolio. Most of the investing class do not have the time or expertise to churn the portfolio to maximise returns and/or minimise risk. This inaction may cause severe losses and/or underperformance.
Retail Investors in India consider Fixed Deposits of banks as liquid n safe and an easy investment option. Little do they realise that interest rates are falling drastically and taxable Investment products like FD’s rarely beat inflation. A post tax return of 4-6% is neither inflation positive nor lucrative in any way.
There is enough historical data to prove that Large companies or large cap funds perform better during difficult market and economic conditions. However, in last 3 years, Small and Mid-cap equity funds have given returns that are roughly 3 times the large cap Funds. This is large because small and mid-cap were severely beaten down when the new Modi led Government took charge. They rallied not as much on fundamentals but mainly on “valuations catch up “.
India GDP growth is the fastest in all large economies. Looking at the economic data one can be sure that India is the only bright spot is a dull global economy. BRIC countries, with the exception of India, are also degrowing .
A lot of investors consider SIP as EMI’s. This creates a perception that SIP is something like an EMI (Equated Monthly Instalment). This is incorrect. Rather nothing can be further from the truth. Youth of today is more interested into the EMI, be it for a smart phone or a vacation or a fancy laptop. Whereas a SIP, is the best form of investment.
Empirical evidence proves that the long-term SIP generates high double digit returns. This is due to various reasons.A lot of investors often wonder how many years is long enough. And what if we invest for a longer duration and in the end we find markets at the wrong end of the cycle.Systematic Investment Plans is periodic investment in a mutual funds schemes.
Mutual funds just like the name suggests is a pool of funds created for investments. This has gained prominence in the last few years due to several advantages over investing in stocks directly. Mutual funds do away with a lot of risks associated while investing in stocks and still enables an investor to participate in the growth of equities and stock markets. The probability of losing money in a mutual fund is a lot lower as compared to stock investments. Reasons for the same are many.
There are plentiful benefits that you can enjoy through investing in mutual funds online. Few Noteworthy benefits: Free Yourself From Paper Work: The first and foremost is that you tend to get free from the physical strains of the paperwork wherein you need to fill up forms, make a cheque and comply with the KYC norms. In the case of online investment, you just need to ensure your KYC is in place and thereafter you can make the investments sitting at any given location.
If you are looking out for financial security, then investing in mutual funds is an ideal option. As we are already aware that Mutual Funds are professionally managed funds that are highly regulated and well-diversified pool or stocks &fixed income securities. However, we may not know how to start investing and if we really need a mutual fund advisor? Other relevant questions may be come across in your mind like if online mutual fund investment provide better control and monitoring? Here we answer some of these basic questions
Learning basics of wealth creation is essential to achieve your financial goals. This also includes understanding when to conserve capital and when to be bullish and grow your money. An important reason that your money is not growing is that you may not have factored inflation in your returns. Every investment should beat inflation or else it is just erosion of your capital. Apart from inflation your investments should factor in risks and risk adjusted returns. Lastly before writing a cheque you should know if the returns are taxable or tax free.
A lot of people believe that stock market related instruments are risky. This stops them from investing in equity mutual funds as well. However, nothing can be further away from truth. In fact there are diverse, plethora of options an investor can choose from to lower risk and earn a decent ROI.
Retail investors keep on debating if long Term SIP’s (Best Systematic Investment Plan) are risk-free or not. There seem to be unanimity amongst Industry experts, that the SIP’s with a tenure of minimum seven years can reduce risk significantly, but cannot completely eliminate risk.
As we all know tax saving is essential not only because it helps save taxes but also help us generate a higher post tax return. it would be all the better if we invest in the best tax saving mutual funds scheme.
Investing in mutual funds is an excellent option as the returns as well as tax benefits are much higher as compared to the other traditional products like PPF, PF, NSC, LIC ULIP’s etc
The current market scenario is offering more than 3500 mutual fund investment schemes which make it a very challenging task for the investors to understand which scheme suits them the best.
Introduction to Mutual Funds
Over the past few years, investors are showing great interest in mutual fund investments. Not only High Net Worth individuals but even young working professionals are service class individuals nearing the retirement age are looking to invest in Mutual Funds to grow their hard earned money.
Tax planning is one of the most important priorities for individual tax payers. It is a daunting task to save tax, but with the help of tax saving scheme, you can not only save your taxes but even grow your wealth. In order, to find the best schemes it is essential to understand about the various tax saving funds, commonly known as ELSS or equity Linked saving schemes;
The National Pension System or NPS is pension system started by the Government of India In the year 2004, the Government of India decided to do away from a fixed pension system to a fixed contribution pension system.. Government of India was running a huge pension deficit and NPS was started with the aim of reducing the liabilities of Govt. of India. Therefore, on Aug 23, 2003 PFRDA (Pension Fund regulatory development authority) was set up to administer the NPS. From 2004, central and state Governments started contributing a fixed sum every month towards the employees’ Pension Fund. Employees contribution is fixed at 10% and that is matched equally by The employer. The returns from the NPS fund alone will determine the pension a Government employee will get post retirement.
Brief of Systematic Investment Plans (SIP)
In order to help investors with professional management of investments, and achieve their financial goals, we provide a myriad of fund families for the SIP . We thoroughly understand dreams and aspirations of modern day individuals like owning a dream house, going out for a perfect holiday destination, retirement planning, planning for Child’s higher Education etc. We work towards transforming these dreams into reality. We create the customized mutual fund portfolio as per requirements and risk appetite of our clients.
Mutual Funds are the comprehensive, professional and well-regulated mechanism that makes investments in stock market easy and simple. It is a professionally managed investment vehicle and that enables investors to invest in listed securities.
Ask yourself, how many times have you planned to close certain bank accounts and invest idle cash in a productive way or how many times in an year do you access your long term financial goals? “We all plan to plan” and then forget about it. How many times do we plan to close low yielding ULIPS and other Insurances and buy Pure Term Insurance?And how often do we execute what we plan? Benjamin Franklin once said “you may delay but time will not”. That is so true. In financial world opportunities missed are not likely to come by even if they do, they will have taken years of your precious time.
There is a lot of debate on need for women to be proactively involved in financial planning. It has been seen when women are working, they tend to plan finances. As they earn, save taxes, and invest. So, investments and long term financial goals are a need as well. Regular interactions at the workplace educates them of different financial products. Moreover, its been seen women are more inclined towards education and savings for education of their children. Contrary to popular belief that women are spendthrift.