1. Markets are unpredictable and will always have periods when it will do well, periods when it will falter and periods of extreme volatility.
2. Therefore, there is never a good or bad time in investing for long-term goals, but just the right way to do so.
3. SIP investment in equity, across all market cycles, is the best way to proceed, with diversification within fund houses and types of funds.
4. If you are a first time investor, you should consider a balanced equity fund which will allow you to understand the mechanics of fund investing at low risks.
5. You should look at SIP as an optimizing tool which helps you manage anxiety, as it is nothing else but programmed investing that you do for a defined time frame.
6. The benefits of SIP are immense, but most importantly it does away with timing the market and averages the investments over time, which is desirable when investing in equity mutual funds.
7. For young investors, there should be a balanced allocation of your hard-earned resources, salary for most, among your specific needs priorities, like dependent old parents, child education and upbringing, own retirement corpus, health and life insurance, contingencies and emergencies fund, lifestyle and social needs, and of course a splurge fund.
8. For achieving them, you could have SIPs in different long-term funds, as long as you are comfortable with the strategy, and are investing only your net surplus money without any short-term withdrawals.
9. These funds should be 4/5 star rated in the "Growth" option, comprising of:-
a) An ELSS fund for tax-saving under Sec 80C (no need to open a PPF account, while the "mandatory" EPF is ok),
b) A Multicap fund for riding all market cycles, and
c) A Midcap fund for futuristic economy.
10. A back-of-the-envelope calculation shows that a 25-year young investor's SIP investment of even Rs.2000 per month in each of these funds, during 35 years of earning life, will grow to an accumulated corpus of nearly Rs. 4 crores by the age of 60.
2. Therefore, there is never a good or bad time in investing for long-term goals, but just the right way to do so.
3. SIP investment in equity, across all market cycles, is the best way to proceed, with diversification within fund houses and types of funds.
4. If you are a first time investor, you should consider a balanced equity fund which will allow you to understand the mechanics of fund investing at low risks.
5. You should look at SIP as an optimizing tool which helps you manage anxiety, as it is nothing else but programmed investing that you do for a defined time frame.
6. The benefits of SIP are immense, but most importantly it does away with timing the market and averages the investments over time, which is desirable when investing in equity mutual funds.
7. For young investors, there should be a balanced allocation of your hard-earned resources, salary for most, among your specific needs priorities, like dependent old parents, child education and upbringing, own retirement corpus, health and life insurance, contingencies and emergencies fund, lifestyle and social needs, and of course a splurge fund.
8. For achieving them, you could have SIPs in different long-term funds, as long as you are comfortable with the strategy, and are investing only your net surplus money without any short-term withdrawals.
9. These funds should be 4/5 star rated in the "Growth" option, comprising of:-
a) An ELSS fund for tax-saving under Sec 80C (no need to open a PPF account, while the "mandatory" EPF is ok),
b) A Multicap fund for riding all market cycles, and
c) A Midcap fund for futuristic economy.
10. A back-of-the-envelope calculation shows that a 25-year young investor's SIP investment of even Rs.2000 per month in each of these funds, during 35 years of earning life, will grow to an accumulated corpus of nearly Rs. 4 crores by the age of 60.