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Sip presentation

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Sip presentation

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Sip presentation

  1. 1. 1 SYSTEMATIC INVESTMENT PLAN Submitted By : Sudarshan poojary DPGD/AP12/1061 Prin. L.N. Welingkar institute of Management Development & Research
  2. 2. 2 What is a SIP ?  SIP means Systematic investment Plan  It is one of the ways to Invest in Mutual Funds  Through SIP you can invest in mutual Funds in small investment on a monthly basis  The investment is done directly by debiting your bank account on a specified date  You can start your SIP by filling up a simple SIP form and providing bank auto debit Mandate.
  3. 3. Things you should know about SIP  Your SIP does not stop if you miss an installment  The AMC does not charge you any money for missing an installment  Your bank however, may charge you as per banks policies  All SIPs are done in open ended funds  There is no lock in for your SIPs ( except tax saving)3
  4. 4. Features of SIP  Affordable to small investors  Low market risk through rupee cost averaging  Compounding effect  Easy liquidity  Easy mode of Payment 4
  5. 5. Advantages of SIP  It is entirely mechanized process and involves no complications  Investments are consistent and steady  Power of Rupee Cost Average : Market’s volatility shall work wonders for you.  It enables to over come spending and encourage savings, thereby securing future  It will not cause strain on one’s budget as amount invested is very less5
  6. 6. Disadvantages of SIP  Limited options of dates.  Way out  Fixed amount  Stopping intermediate payment:  Lot of delay between actual application & start/stop of SIP:  Does not suit people with unpredictable cash flows 6
  7. 7. Disadvantages of SIP  Portfolio risk remains  Ignore the market Swings  Periodical review of investments  Timeframe for the Mutual Fund SIP:  Contribution towards Mutual Fund SIP Changes  Portfolio Review and Mutual Fund SIP 7
  8. 8. 8 Why Invest ?  Children’s education / marriage  Medical Emergency  Retirement  Aspirational goals – House , Foreign Holiday  Other Obligations
  9. 9. 9  The lower interest rates over the years have been worrying him.  He decides to take the help of Sreeni , financial advisor.  After carefully evaluating his financial goals and time required to achieve his financial goals , he advises him to invest in equity mutual funds for following reasons — Portfolio diversification — Superior returns ( refer slide on cumulative annualized returns for different asset classes for details ) Systematic Investment Plan
  10. 10. 10  However, Anil is not comfortable investing into equity mutual funds as they are volatile and therefore risky and avoidable.  Sreeni advises Mahesh to register for Systematic Investment Plan (SIP) and make use of volatility in the market rather than get worried and avoid investing in equity mutual funds.  Anil is not clear as to how SIP will work to his advantage and requests for more details  Sreeni explains as follows : Systematic Investment Plan
  11. 11. 11 Systematic Investment, An example  Rahul & Viru are two friends. Rahul decides to invest using SIP whereas Viru decides to make lump sum investment.
  12. 12. 12 Systematic investing , An example
  13. 13. 13 Systematic Investing, An example
  14. 14. 14 Why Systematic Investing?  The Goal of most investors is to buy when the prices are low, and sell when the prices are high.  Sounds simple, but trying to time the market like this is : 1. Time Consuming 2. Risky 3. And almost Impossible  A more successful strategy is to adopt Rupee Cost Averaging.
  15. 15. 15 Three common reasons for not investing  I don’t have enough money to invest  I am too busy making money to worry about managing it  I don’t have the time or expertise to follow the market movements and make investments at the right time. SYSTEMATIC INVESTMENT PLAN is the only answer to all reasons.
  16. 16. 16 How to make Sip work for you ? Set your financial goals Identify the scheme Decide the SIP amount Look for a long term commitment Aim for the big picture Start investing.
  17. 17. 17 Thank You

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