Do not stop SIP now

Do not stop SIP now

Dear investors, I request you to please do not stop your mutual fund SIP. Avoid redemption unless it is very urgent. I have got many calls in these days regarding stop SI and redemption as our market indices Nifty and Sensex are going down. Retail investors who have invested in equity through SIP should not end their investment. Many investors may close their SIP plans as they realize that market has not given them returns over the past 12 months.

If retail investor stay invested and continued with their SIP plan, they will end up very good return by compounding power. Since March, 2015 the benchmark indices have lost 18% from their record highs. Investing in SIP like a bamboo tree, which does not grows in the first four years, but goes and touches sky in the fifth year.

During Modi wave, market had grown 30% so now there may be some wait for next rally. Now FIIs are pulling out money but DIIs are pumping money in the market. Central government is taking so many initiatives to get fund which will deliver growth. It is very prudent decision if you stay invested in equity in these tough times.

If you have doubt about investment product and want more information regarding investment or you need investment services, feel free to ask us. We also conduct the seminar on investment and financial planning. If you are interested for conducting seminar in your city, just drop the mail.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

SIP Role in Financial Planning

SIP Role in Financial Planning

When we make our financial plan, we set some future financial goals and to reach those goals we also make some investment strategy. Systematic Investment Plans (SIP) is the best way to invest for your goals. In SIP investment we invest a fix amount in predefined regular time frame. The amount would be deducted from your bank account on the fix date of your choice. You can choose any mode of payment like monthly, quarterly or your specified mode. Here we will discuss some SIP related points which will be beneficial for you.

Assign your financial goal:

As we have discussed about in earlier post that every investment should have some purpose. Link your each SIP to a particular financial goal like children’s marriage and education, your retirement corpus, purchase new vehicle or house, foreign holiday tour etc. Your asset mix should have according to your investment time frame like if your goal is more than 10 year far from now then your asset allocation more tilted towards equity.

SIP Timing:

Many investors want to time the share market, however it does not make any sense in the view of return. If you invest in 4 different funds then divide your SIP date in different weeks in a month. Doing this you will take benefit of the volatility of the market. Monthly SIP is the best mode for salaried person. There are many modes available in the schemes like fortnight, daily quarterly and half yearly etc.

Increase your SIP Amount:

Every year when your salary increase, your SIP amount also should increase in line with increment. Most of the investor miss it and stay invested as per earlier mandated amount. With each increment in your salary you should increase your SIP amount also. It is called step up SIP. If you do not have a particular amount for SIP in current situation for a particular future goal the go with step up SIP and increase SIP amount every year to achieve your goal.

Portfolio Revision:

Every year you should review your portfolio. It does not means that the changes in investment strategy. It means if you are approaching near to your goal then decrease your equity portfolio and transfer it towards debt to avoid market volatility. If a particular asset class has performed very well then you can rebalance your portfolio according to your time, age and goal.

Invest in SIP is the best strategy to achieve your financial freedom. If you have any query or doubt, feel free to ask us.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

www.artofinvest.com