Mutual Funds

 SIP is Systamatic Investment Plan. We can start SIP with as low as Rs.500 every month. For small investors who want to invest in stock market can go through SIP.  When markets fall, we will get more units and when markets raise, our investments grow faster. On the other hand, Lumpsum amount is invested only once. Even when market falls, we may not have sufficient funds to add. More over, many people can’t afford to pay Lumpsum at a time. So investing in Mutual funds via SIP mode is easy.

 Before investing in Bitcoins, we need to search answers for below questions. Who regulates Bit coins? In India, RBI regulates and governs all financial activities. Then why are they not involving in Bitcoins? RBI clarified that they are not going to permit in trading Bitcoins and if any one interested to do so, can do at his own risk. If you can find answers for these questions, you can invest in Bitcoins. On the other hand, Mutual Funds are regulated by SEBI.  All Mutual Fund Houses should follow the guidelines of AMFI under the purview of SEBI. AMFI - Association of Mutual Funds in India. SEBI - Securities and Exchange Board of India.

 It depends on the age and requirement of the investor. One should have a goal based investment approach. Dream of Own House, Self retirement and Kids education, marriage are primary goals for most of us. So, we can continue SIPs till we achieve those goals.

We can park the corpus in Debt Mutual Funds or in Liquid Mutual Funds and systematically withdraw at regular intervals. This process is known as Systamatic Withdrawal Plan (SWP). This is useful for a person who is retired and need money for his daily needs.  He can fix a day to withdraw a portion of the corpus.  Every month the said amount will be credited to his bank account on that particular day. In the past, debt mutual Funds gave a return of 8% to 10% where as Liquid mutual Funds gave a return of 5% to 6%.

Returns are purely dependent on markets for all Equity Mutual Funds.  We can expect good returns in longer period.  Goal based investments are more profitable if invested for 10 years / 15 years / 20 years and so on. Long term investments are suitable in below situations: 1. A person aged 30 years has 30 years for retirement.  So if he starts at the age of 30 years and start SIP for next 30 years, he can accumulate good wealth. 2 . Young couple with new born kids.  They can start investment for next 20 years.  After the kids grown up, the accumulated fund can be used for their kids higher education or marriage. Every one will face above situations in their life.  So planning early will give good returns. In the past 20 years, Equity Mutual Funds gave Compounded CAGR return of more than 15% annually .  We can expect this return in next 20 years also if we continue investing.