Systematic Investment Planning
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Systematic Investment Planning

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Systematic Investment Planning Systematic Investment Planning Presentation Transcript

  • Learn IfSystematic Investment Planning is what you are looking for? © 2009-2011 Copyright by InvestCare Pvt. Ltd, www.investcare.in
  • Sometimes, we can’t invest a lot of moneyWhy?Because, we either don’t have it or we simply don’t want to.But, we still want to invest, because we may foresee ourselvesbuying a house after 5 years, or paying for our genius’s education.Well, what is the option then? © 2009-2011 Copyright by InvestCare Pvt. Ltd, www.investcare.in
  • Well, Invest a little, off course.What else?But Invest regularly.It is a good practice to instill investing discipline withoutburdening ourselves with too much financial liability. © 2009-2011 Copyright by InvestCare Pvt. Ltd, www.investcare.in
  • Good Idea?Let’s find options.There are many options like ….Well, most such options are fixed income optionsResult: Moderate Returns  © 2009-2011 Copyright by InvestCare Pvt. Ltd, www.investcare.in
  • You are happy. Fine.But, what if you are not?What if you are interested in aggressive returnsby playing in the equity-share market like everyone else?Well, if you are an absolute genius investor.Then it’s all rightbecause you will know exactly what stock to buy, and howmuch to buy, and at what time in the market? © 2009-2011 Copyright by InvestCare Pvt. Ltd, www.investcare.in
  • What if you are not?What if you bear the risk of timing the market incorrectly justlike everybody else out thereincluding financial experts, except may be for acertain Warren Buffet. © 2009-2011 Copyright by InvestCare Pvt. Ltd, www.investcare.in
  • Let’s talk about an interesting alternative,It is not an investment option but rather a way or a method of investingIt is calledSystematic Investment Planning. © 2009-2011 Copyright by InvestCare Pvt. Ltd, www.investcare.in
  • It is considered as one of the most effective waysof investing in equity, across the world.Why?Because, it ensures better returns by helping us timeour investments perfectly.How?There is a simple logic at work. Rupee Cost Averaging.Well, don’t get fooled by the complicated name.Give me a minute, and you will exactly understandhow it works? © 2009-2011 Copyright by InvestCare Pvt. Ltd, www.investcare.in
  • I am sure, we all know that,It is good to buy in the market when the prices are low.Why?Because it costs lessAnd it is good to sell, or buy less when the prices are high.If you do that every month, buy more when the prices are lowand sell or buy less when the prices are high. You have gotyourself a good deal.Well, off course, it isrisky, difficult and time consuming to time themarket every month. In fact, it is almost infeasible.What do you do then? © 2009-2011 Copyright by InvestCare Pvt. Ltd, www.investcare.in
  • How about investing a fixed amount every month,let’s say 3000 Rs. a month and buy as much as you getIf the price is low, let’s say the price is 100 Rs., you end upbuying more which is 3000/100 or 30 units.And, if the price is high, let’s say, 125 Rs., you automaticallyend up buying less which is 3000/125 or 24 units.This wayyou buy less when the price is high and buy more when theprice is low, automatically. © 2009-2011 Copyright by InvestCare Pvt. Ltd, www.investcare.in
  • Let’s say you kept on investing this way for 5 years, buyingmore when the price is low and buying less when the price ishighContrast this with another case of a gentlemen whowoke up one fine morning and invested all of his money atonce. Well, he is taking a big risk unlike you by trying to timethe market perfectly.Which is again fine if he is a genius investor.The only problem is that he is not and therefore he ends upwith poorer returns.Heard this story in the past as well? I am sure you have. © 2009-2011 Copyright by InvestCare Pvt. Ltd, www.investcare.in
  • The risk is real.Timing the market perfectly is difficult.Buying at the wrong time is equally likely.Result: Poor returns Whereas, with SIP, you never have to take the decision oftiming the market. The logic of Rupee Cost averaging does it foryou.The only catch is that you must stay invested for a reasonably longperiod of time to enjoy good returns, 3 years to say the least.If you are investing with a short term perspective, you can perhapsfind other better alternatives.And if you are investing with a long term perspective like5-7 or 10-12 years then, Systematic Investment Planning is truly, agreat option for you. © 2009-2011 Copyright by InvestCare Pvt. Ltd, www.investcare.in