नमस्कार , इस साल कठनाइयों के चलते अपने
अपनी SIP बंदकर कर दी थी .....
जैसे काफी सारी चीज़े Back to Normal हो गई है,
आशा करता हूँ की आपका काम भी
अब Back to Normal हो गया होगा !
आईये , इस धनतेरस पर उस बंद हुई SIP की फिर से शुरुआत करे
क्योंकि बचत होगी तभी तो पैसो में बढ़त होगी !
SIP Restart करने के लिए या इससे सम्बंधित कोई भी जानकारी के लिए, मुझे Call करे !
बूँद बूँद से सागर बनता है,
ऐसा सुना तो था, लेकिन अब देख भी लिया।
क्या आप जानते है
अगर आप 10,000 रुपये हर महीने Invest करते Mutual Fund की SIP में , सं 2000 से अब तक,
तो पिछले 20 साल से हर महीने Invest किये हुए इस पैसे की आज क्या Value होती ?
20 साल से बूँद बूँद कर SIP के थरु आप ने Total 24 लाख रुपये Invest किये !
इन 24 लाख रुपयों की आज की Value
लगभग 1 Cr. 40 लाख रुपये है !
क्यों? है न SIP, सच में बूँद बूँद से सागर बनाने का तरीका
इस धनतेरस, आइये अपनी नयी SIP शुरू करे या अगर आप आलरेडी एक SIP इन्वेस्टर है , तो अपनी SIP का Amount बढ़ाइए !
आपको और घर से सबको हैप्पी दिवाली
हम आपको आपकी SIP के साथ Mobile App और ID Password भी देंगे
जिससे आप अपने Port Folio Balance अच्छे से देख सकते है |
How To Navigate the Volatile Market?
The stock market can become volatile at
times. ( see table: One year journey of Sensex) even the most seasoned equity
investors get a bit distracted by all the screaming front-page headlines and
running commentaries. Many individual investors also get extremely nervous about
the market in the process. Several of them simply decide or would start looking
for ways to get out of the stock market altogether to escape the volatility.
Many investors believe that this is the perfect strategy to adopt because they
believe the best way to tackle volatility is to get out of the market, many of
them would immediately stop their further investments; some would start selling
their investments even at a loss. Sadly, the whole approach is wrong. Running
away from the market is not the best way to tackle a volatile or choppy market.
The opposite of it works better. Several studies have proved beyond doubt that
the more time you spend in the market the better your chances of tackling
volatility and creating long term wealth.
Take a look at any index over a long
period, say ten or fifteen years, you would notice that none of them shoot up
like an arrow. There would be so many ups and downs that look so tiny at the
first glance, but when you click on them you would figure out the they were
indeed significant movements at that time. So, the first point to remember is
that you can't totally avoid volatility in the stock market.
The second point to keep in mind is that
volatility is not necessarily a bad thing. For example, imagine a market that
is steadily climbing every day. Sooner or later the valuations of every stock
would become very expensive future earnings won't justify the premium they
command in the market. In such a scenario, it won't make sense to invest in
stocks. That is why many investors believe that the market is very
efficient and it has its perfect way of finding the right price of every
commodity. So, always look at a correction phase in the market positively.
Third, want to beat volatility? As said
before, don't run away from the market. Yes, you heard it right. It is the only
way to beat Volatility. Running away with losses weren’t help your case. Sure
you many be planning to get back to the market when it stabilizes, but by that
time everyone would be trying to buy stocks and stocks may again become
expensive. If so, another correction may be around the corner, What will you do
then? Again run away from the market?
Just take a look at the returns offered by
equity mutual fund schemes in the last 10 years and you will understand what we
are trying to say. Investors in these schemes have weathered many storms such a
global economic crisis and other political factors back home. But these
investors stuck to their investment plans and today they have every reason to
celebrate. (See Table: Equity
MF returns in the last 10 years).
Relax and find out the reason
The market has crashed 500 pints in the last two days.
Are you feeling really nervous? Before hitting the pause or exit button, just
take a deep breath. Next thing to do is to find out the reason behind the fall.
For example the fail may have nothing to do with the domestic economy or the
performance of the companies listed in the market. It may be because of some
development in a remote corner in the world. However, at that time it may look
as if the trouble is likely to stay for a while and it may spill over to
markets all over the world. However, with the benefit of hindsight, many
investors find that these so-called big events didn’t have such a lasting
impact on the market and they definitely did not warrant a sell transaction
from their side.
The market has climbed over 13 per cent in the last
year. However, if you are one of those extra caution investor running away from
the market at the first sight of volatility, you wouldn’t be participating in
this rally. This is because you wouldn’t have got into the market at the beginning
of the rally because nobody we sure about the outcome of the general election.
Or if you really bought all the pessimism regarding the success of the new
government, you would be still waiting for concrete signals for the growth to
pick up before entering the market.
Taking Hasty Decision
As a rule, do not take hasty decisions to buy or sell
investments in stocks on the basis of temporary movements in the market. Just
because the market has fallen 500- points on two consecutive days is not a
reason to make a quick exit. Similarly.
You should not stay away from the market simply
because some people believe that the stock market can’t be a safe place until a
total global economic recovery. This is for your own good. Innumerable studies
have proven that not with-standing the short-term volatility equity has the
potential to deliver over a long period. How various assets have fared however
despite this proven record many people lose patience and money because they try
to time the market.
Timing the market is trying to follow the age-old
formula of buying low and selling high. Of course, you invest in stocks with
the idea of buying low and selling high to make profits, but that is not done
by getting in and out of the market. It is done by making small, regular
investments over a long period of time. This would help you to weather
volatility and also bring down your cost of purchase, which further enhances
your returns.
Hitting the pause Buttton
The moment the market enters a volatile or bear phase
the immediate reaction of many investors is to hit the pause button on all
investments. The general refrain is that we would prefer to wait out until the
market stabilizes. Some investors would even quote some famous investment
expert or spout the market lingo and say that they are sitting on cash for
clear cues from the market. Sadly, these investors are copying someone’s
trading strategy. And trading is not the same as investing. Traders look to buy
and sell shares frequently and they adopt very short-term strategy to earn a
living. This strategy is not meant for long-term investors. Unlike a trader who
wants to pocket quick gains, a long-term investor focuses on creating long term
wealth to meet his financial goals also, a regular investor doesn’t spend all
day tracking market movements looking for every trading opportunity.
When an investor decides to stop his investments in
equity, the entire financial planning goes waste. For example, a person has
started investing regularly in an equity mutual fund to fund his retirement that
is 15 year’s ways. However he suddenly stops investing in equity after five
year because the market has entered a bad phase. As you can see this hasty
decision beats the entire purpose behind the investment plan. The whole idea
behind investing in stocks to fund retirement was because of the potential of
equity as an asset class. However, that wouldn’t happen in this case because
the person has chosen to stay away from the market.
Most often people who abandon their plan mid-away don’t
get back to the market at all. This is because they will try to get into the
market when everything is hunky-dory and that seldom happens in the market.
They would go on indefinitely postponing the investment decision. Some of them
get back to the market again after a sharp rise in key indices, and again they
would repeat the same mistake of leaving the market immediately because there
could be a correction in the market after sharp really.
Stopping Systematic Investment Plans
This is an extension of the earlier point, but it
needs to be dealt separately because a systematic investment plan is probably
the best friend of a mutual fund investor. Systematic investment plan or SIP
allows investors to make small, periodic investments in a mutual fund scheme.
The idea behind SIP is to invest in equities for the long-term without
bothering about the prevailing trends in the market. The method also helps one
to average the purchase price over a period of time. However, the efficacy of the
strategy is completely lost if investors continue or discontinue the plan
depending on the situation in the market.
Investing everything in equity
Does your portfolio dance wildly to the tune of the stock market? You should check your asset allocation plan ( if you have one) or you should start an asset allocation plan immediately. Simply put, asset allocation plan is the act of spreading your investments across different asset classes, depending on our financial goals and investment horizon. The idea behind the exercise is to ensure that your portfolio is not at the mercy of a particular asset class. For example, if a person has put his entire investment corpus in equity, his investment would be extremely volatile when the market enters a choppy phase. However, if the person has diversified his portfolio across different assets such as bank deposit, company deposit, debt mutual funds, gold, real estate, among others, it won’t be swinging only to the tune of a single asset class. Another plus point of having an asset allocation plan is that periodic review allows you to book profits regularly. For example suppose your portfolio consists of equity (60%), debt (30%) and gold (10%). Now, imagine the stock market fell sharply and you have noticed during your periodic review that your total equity holding was down to 50 %. You have to rebalance the portfolio by selling a part of your debt and gold portfolio to bring your equity holding back to the original level of 60%. This will also ensure that your investments.
Betting on small or big Companies
When the market is entering a rough weather it would
be good idea to stick to large and reputed companies. This is because smaller
companies get unduly punished during market volatility. However, this doesn’t
mean that you should stop your SIP in mid or small cap funds. If you have
earmarked a small part of your portfolio to mid and small cap stocks, you
should continue with your investment even when the market is volatile and the
stocks are punished severely. All you have to do is to stick to a mutual fund
scheme with a proven long term track record.
Invest in defensive sectors
Many investors try to park money in defensive sectors that
are immune to the economic activity to a large extent to weather the volatility.
This is because these sectors may be catering to an essential service or
producing a commodity. And customers may not be able to cut down on the consumption
of those services even when they are hard-pressed for money or turned cautious
because of the adverse economic scenario. However, abandoning the original
investment plan in favor of an extra conservative investment strategy may rob
you of a chance to earn extra returns in the long run. This is because
defensive stocks often do not match the performance of active stocks over a
long period. Sure, they outperform in phases, but may not over a long period.
Invest in Gold?
When everything
fails, investors often turn to gold. At least that used to be the conventional
wisdom until a few years ago. (Chart: Gold prices in the last five years)However,
thanks to the lackluster performance of the yellow metal in the last few years,
many investments experts have given thumbs down to gold an investment option or
even as a tool to hedge volatility.
However, this is not to say that you have to sell your
gold holding immediately. Remember, your reason for investing in gold was to hedge
against a gloomy economy. It may still do the duty in times of an overall crisis
in the economy.
If you are an ardent believer in the power of gold as
a hedging tool, by all means use gold to diversify your portfolio. Investors
can use gold ETFs or gold schemes offered by mutual funds to invest gold.
You may be missing an opportunity
Many investors
look at rising market with a certain disappointment. They tend to believer that
they have lost an opportunity to make money from equity because the market has
gone up so high. It is very interesting to note that these investor hardly
consider getting into the market when the markets are falling. This is because they
are convinced that suddenly the market has become a dangerous place to be in.
This is a costly mistake, since they keep on wondering of the right time to
enter the market.
That is why investors should try to make volatility
their friend.
Whenever the market gets into bearish phase, investors
should try to buy what they thought was expensive in a rising market. In Fact,
this is the basic premise on which SIPs operate. If you keep investing via SIP
over a long period, you end up buying more units because of the cost of
averaging. This is because you end up buying more when the market falls and buy
less when the market is rising. The net effect would be averaging of your
purchase cost. (See table: Power of regular investments)
Make tactical allocation
May successful investors use the volatility in the
market to maximise their returns via tactical allocation. They earmark
additional fund for this purpose and make purchases in beaten down stocks or
sectors. These investments are done without disturbing the original investment
plan. Some investors use the fall in the market to accumulate stocks they
already own or they wanted to own. Some investors look at sectors that have
fallen drastically or are on the brink of a revival. The logic behind such
tactical allocation is simple: enhance returns of the overall portfolio by
using the volatility in the market.
Invest in overseas stocks
Tired of the volatility in Indian stock markets? Why don’t you invest in overseas funds? You can invest up to Rs. $250,000 every year abroad. And don’t think it is a very difficult process. It is very easy to invest abroad by using the mutual fund route. All you have to do is to invest in an international fund with a proven per romance record. Sure, there are many investment experts who disprove of this strategy. They argue that developed markets are unlikely to match the returns offered by a developing market like India. The argument has some merit. However, diversification across geographical boundaries is not just about maximizing returns. It is also about insulating your portfolio from the vagaries of a single market.
This level of diversification may not be very useful to small investors. However, those with a large portfolio may find it extremely useful.
