When my wife and myself sat for a review of our financial situation, we had clear dreams and goals that we wanted to achieve. We were looking at investing 20-30 percent of our income at present in long-term investment options and intend to grow this surplus money for better returns. Though we do not have much knowledge about equity markets we are pretty clear about the better returns being offered by equities in the longer run. We have been able to compare returns between the so-called investment products being offered by insurance companies and the returns from mutual fund schemes.
We have explored various options like ULIPs that are being offered by Insurance companies. We have learned that there are various charges like premium allocation and policy administration charges that seem to be on a higher side when compared to zero entry loads in mutual funds.
Mutual funds is a better investment option when compared to the numerous insurance products being sold as an investment product, we feel. And this is validated by the fact that the total AUM for the Mutual Fund Industry in India crossed a whopping Rs 15 lakh crores. It goes on to prove that giving your money to be invested by professionals is the right thing to do.
But with thousands of schemes being offered by the 40+ odd fund houses, to choose the funds became a daunting task in itself. We were also scared of the frequent fluctuations in the stock market and didn’t know how to deal with those fluctuations.
Fortunately, here’s what we stumbled upon the other day. It can make our choice easier and many others like me facing the same dilemma. Here is a convenient & informative method offered by Birla Sun Life Mutual Funds.
We can start our investments tagged to a particular financial goal. Here’s what Birla Sun Life Sabse Important Plan starts off with:
When we consider investing in equity, the two big thing we get confused about is:
- the market going up and down.
- which stocks to buy.
While going through the Birla Sun Life’s page on the “Sabse Important Plan”, we learned one new concept called Systematic Investment Plan (SIP). While SIP actually stands for Systematic Investment Plan, it can be your “Sabse Important Plan” too!
To address the first problem, experts essentially tells us not to worry about market fluctuations and not ever try to time your market entry or exit.
It is impossible for a layman investor to predict the movement of the markets. Hence it is best to start investing on a staggered basis by making regular monthly investments. This helps the investor to spread out his investments evenly over a period of time. This process of making regular monthly investments over a period of time at various market levels is known as Systematic Investment Plan.
There are many benefits of getting into a systematic investment plan and it starts with inculcating the habit of regular disciplined investing. The SIP helps to ride out market fluctuations and protects the investor from incurring huge losses when the market falls drastically by averaging the purchase price at lower levels.
SIP is Systematic Investment Plan where you give a mandate to your Bank to send a fixed amount to a mutual fund scheme. Every month Rs X is transferred from your bank account to the fund scheme account. By doing this, every month on a stipulated date, you have created a system for your investments.
The second problem of selecting the right stocks to buy is taken care of by Fund Managers who are definitely more knowledgeable about the markets and it’s their full-time job.
Birla Sun Life’s Sabse Important Plan (SIP) uses all the benefits of the systematic investment plan and the Fund Manager’s expertise. It helps a common investor with a convenient and efficient way of investing. It helps users achieve their goals and dreams more efficiently.
Everyone has dreams and goals that they want to fulfill. These goals need a smart planning and execution. Birla Sun Life’s SIP can be that one-stop solution for fulfilling your dreams. Check it out.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
In view of individual nature of tax consequences, each investor is advised to consult his/ her own professional tax advisor. Past Performance may or may not be sustained in future. Investment in Mutual Fund Schemes carry high risk and any investment decision needs to be taken only after consulting the Tax Consultant or Financial Advisor.
Good luck with your goals!