Wealth Creation through SIP

Shape your wealth through SIP

Shape your wealth through SIP

SIP Introduction

Whichever way you choose to invest your money to create wealth, one thing is for sure, the sooner you start the better off you will be. Once your investment returns start compounding year after year, you will really start to see the effect it has on your wealth creation activities.

Uncertainty is the basic nature of stock markets. Time and again, the markets have proved investors wrong by showing their unpredictable nature. This impact is most crushing on retail investors. Is it possible to ride on the stock market volatility, without getting hurt? Yes, it is! For this two simple principles need to be followed religiously.

1: Stay invested for long term.

2: Adopt a systematic and regular approach towards investment.

SIP in mutual funds is one approach which lets the investors follow the two basic principles of investing at one go.

Benefits of SIP

  • Monthly contribution: Investing at one go proves to be a burden on the pockets of investors. On the other hand, monthly investment in small amounts is more feasible for them. SIP provides this benefit to retail investors, wherein they can invest a part of their monthly savings regularly. The initial investment amount may be as low as Rs.500.
  • Systematic approach: SIP helps in investing consistently in a disciplined manner and further it helps in compounding returns as well.
  • Rupee-cost averaging: Any market witnesses ups and downs over a period. The best investment approach to be followed in such cases is a SIP. Here, irrespective of the NAV movement an investor acquires more units compared to a one time investor. Successively, this means higher gains. The following table illustrates the same.
Month NAV (Rs.) Amount invested in SIP (Rs.) Units allotted Amount invested in lump sum Units allotted in lump sum investment
1 10 5000 500.00 25000 2500
2 8 5000 625.00
3 10 5000 500.00
4 12 5000 416.67
5 10 5000 500.00
Total 25000 2541.67 25000 2500

SIP approach lets the investor to buy more units when the prices are low, thereby bringing down the average cost for the investors.

  • Timing the market approach : Consider three cases. Sehwag invests Rs.5,000 at the index level on the first day of every month. Dhoni, being lucky, invests the same amount at the lowest value of the index every month; and Kaif, unfortunately invests the same amount but at the highest level of the index during that month.
Investment made Sehwag (indifferent) Dhoni (most lucky) Kaif (unlucky)
BSE Sensex returns 11.42% 11.34% 9.93%

Note: An investment of Rs.5,000 is made monthly for a period of 5 years (July’12 to June’17). Returns are XIRR of investments.

The returns in the above three cases differ by a very small margin, showing that while investing for long term, it doesn’t really matter whether you are investing at market peaks or market lows.

Hence time in the market is more important than timing the market. Investing through SIP frees you from timing the market because over a long horizon, SIP investment evens out the market ups and downs.

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

Top 10 Tax Saver Mutual Funds for 2017 – 2018

Best 10 ELSS Mutual Funds to Invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Tata India Tax Savings Fund

3. Birla Sun Life Tax Relief 96

4. Sundaram Diversified Equity Fund

5. ICICI Prudential Long Term Equity Fund

6. Invesco India Tax Plan

7. Franklin India TaxShield

8. Reliance Tax Saver (ELSS) Fund

9. BNP Paribas Long Term Equity Fund

10. Axis Tax Saver Fund

Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

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Call us on 94 8300 8300

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How Does SIP Work?

How Does an SIP Work?

Systematic Investment Plan (SIP) is the buzzword among investors who are pouring in close to `5,000 crore into equity mutual funds through the SIP route every month. Experts say an SIP is the most effective way of investing, especially for retail investors.

Let’s find out more about SIPs and how they work.

1. What is an SIP?

An SIP is a specific amount, in vested for a continuous period at regular intervals, generally on a monthly ba sis. Using this method, an investor buys units of a scheme at a pre-de cided frequency . SIPs, which help investors take part in the stock market, obviate the need to time the market, and also bring a disci pline to their invest ment methodology .

2. When can I start an SIP?

In an open-ended mutual fund scheme, you can start an SIP any time you want. Just fill up the application form along with an SIP mandate and submit it to the point of acceptance. It generally takes 10-30 days for the bank to reg ister your SIP mandate and start it. Some fund houses allow you to

3. For how long can you run an SIP?

Most fund houses stipulate a minimum of six months for an SIP . Investors can choose any tenure they wish or they may even opt for the `perpetual option’, which means the SIP will continue till the investor gives an instruction to the fund house to close it. Financial planners suggest investors to link each SIP to a goal and continue with it till the goal is reached.

4. Can you change the SIP amount?

An investor can increase or re duce his SIP amount, by first cancelling the existing mandate and giving the revised one. Fund houses do not charge any penalty for stopping the SIPs.

5. Can I invest lumpsum in a scheme in which I have an SIP running?

Yes, you can add a lumpsum amount to the same scheme in which you are running an SIP. It does not affect the SIP.

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

For further information contact SaveTaxGetRich on 94 8300 8300

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Tax Saving with Aditya Birla Sun Life Balanced Advantage Fund

Aditya Birla Sun Life Balanced Advantage Fund (An Open ended Asset Allocation Scheme) not only offers a balanced approach to investments but also provides equity taxation benefits on investments.

This fund is structured in a way that the minimum exposure to equity is at 65% which allows the fund to be eligible for tax benefits under Equity on the entire amount invested after 1 year of investment. (Holding Mutual Fund investments in equity oriented funds for more than 1 year classifies it under the Equity category hence the outcome being Long Term Capital Gain or Long Term Capital Loss which is not taxable).

Start with Ultra Short Term Funds

We have found a new way to educate new investors flocking to invest in mutual funds. Eager to make extra returns after banks slashed interest rates on deposits after demonetisation, these investors have absolutely no clue about how funds work. We generally advise new investors to start with ultra-short term funds because these funds offer a good experience in terms of returns, risk and liquidity. These debt funds are the best ‘first-step’ towards equity investments or any other type of mutual fund investment in the future

those investors typically do not have any previous investing experience and they are scared of volatility in the market and concerned about liquidity of their investments. These individuals will ask you things like what if we need the money tomorrow or what if the value of our money goes down. The fear is majorly because of the lack of experience in investing. So, better than asking them to go for a balanced fund directly, it is good to get them started with a low risk product like an ultra-short term fund. They get better than what they are getting from their bank deposits

We ask new investors to the stock market to opt for equity-oriented hybrid funds or balanced funds. These funds invest in a mix of equity and debt and they are comparatively less volatile than pure equity schemes that invest their entire corpus in stocks. However, a totally inexperienced investor may still find them risky and volatile. Ultra short term schemes, on the other, are pure debt schemes that can be used to park money for a few months to a year.

These funds have offered an average return of 7.5 per cent in the last one year. They also have a small edge over bank deposits when it comes to taxation. If investments in ultra short term schemes are held over there years, returns are taxed at 20 per cent with indexation benefit. If investments are sold before three years, short term capital gains are added to the income be taxed according to the income tax slab applicable to the investor.

We get these investors start with an ultra-short term fund. Later, when they are convinced and happy with the investment, it serves as a mother fund for STPs in equity funds

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

For further information contact SaveTaxGetRich on 94 8300 8300

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You can write to us at

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PRINCIPAL GROWTH Fund

PRINCIPAL GROWTH Fund has no market-cap bias but, currently, it has a higher tilt towards mid-caps compared to its peers. The fund manager adopts a strict bottom up stock selection approach with no sector calls. He prefers firms which are dominant in their sectors with earnings profile that beat the sector as well as market expectations.

The portfolio is heavily diversified with a long tail as a result of a conscious approach to distribute risk thinly across stocks with lower market-cap.

PRINCIPAL GROWTH Fund top bets are index heavyweights, but the portfolio construction is benchmark agnostic. The fund’s longer-term track record is not impressive, but it has put in a strong showing in recent years, making it a worthy candidate in the flexi-cap category.

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Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

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Call us on 94 8300 8300

Invest in Mutual Funds to earn more

Bank Deposit Rates are cut

Many individuals are concerned about more banks following the example set by State Bank of India BSE 0.71 % and reducing interest on savings bank deposits and fixed deposits. Many of them, especially retired folks who bank on interest income to take care of their living expense, believe that further reduction in deposit rates are likely to put their finances under severe strain.

The public sector leviathan cut interest rates on savings bank deposits by 0.50 per cent on Tuesday. The move, coming two days before the Reserve Bank of India’s monetary policy review, probably heralding a change in savings bank deposit rates, as many large banks take cue from the public sector major. A rate cut by RBI tomorrow may result in cuts in term or fixed depoists, too.

But should investors be worried? Well, a little bit may be, but not more that that. To begin with, one should not keep a lot of money in savings bank account. Remember, savings bank account mostly offer measly 4 per cent per year. That doesn’t even beat the inflation. Even term deposits barely beat the living inflation. So, it would be a better idea if you can turn your attention to mutual funds to earn a little extra return.

If you are parking the money for a year or little over a year, you may take a look at arbitrage funds. Arbitrage funds look to exploit the price difference of securities between the cash and future market. These schemes are treated as equity schemes for the purpose of taxation. That means if investments are held over a year, they qualify for long-term capital gains tax. Long-term capital gains tax on equity schemes is currently nil. Arbitrage funds offered 6.31 per cent return in the last year.

Investors can also take a look at various debt schemes, depending on their investment horizon. Debt mutual funds are riskier than bank deposits, but they may also offer marginally higher returns. They score on after tax returns if investments are held over three years. Investment in debt funds held over three years qualify for long-term capital gains tax of 20 per cent with indexation. The indexation benefit helps to reduce tax considerably, especially when inflation is high.

bank rates

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

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Call us on 94 8300 8300

SBI Magnum Balanced Fund

With markets recording new peak almost every day, there is a great deal of caution among retail investors. Some are worried about an imminent fall while there are many who believe that strong liquidity in markets may arrest any fall. For those who are worried, investment in balanced schemes are a good option. Balanced schemes provide reasonably good exposure to equities and debt. Among balanced schemes, SBI Balanced Fund has given encouraging performance in the past three-year and five-year periods in comparison with its peers and benchmark index.

SBI Magnum Balanced Fund scheme has given 14.7% and 19.2% returns in the past three-year and five-year period, respectively, while its peers have given 14% and 16.6% returns in the same period. On the equity side, the scheme has healthy exposure to large cap and mid-cap companies . On the debt side, the scheme has good exposure to government and AAA-rated securities. Long-term investors can consider investing in the scheme with a time horizon of least three years.

In the past six months, the SBI Magnum Balanced Fund has invested in diversified large and mid-sized companies which have reasonably good earnings’ growth. A few of these prominent companies are Allcargo Logistics, Apollo Hospitals Enterprise, Colgate-Palmolive (India), Gillette India, ICICI Bank, IRB Infrastructure Developers and Thermax.

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Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

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Call us on 94 8300 8300

Aditya Birla SunLife Equity Savings Fund

When the bulls are ruling the market, as they are right now, incremental investing in equity seems risky. But it doesn’t mean that an investor should stay on the fence and settle down with earning returns lower than inflation also. The need of limiting downside risk while also earning inflation beating returns can be met through Hybrid Funds. Hybrid Funds invest in both equity and debt but in controlled and balanced way to mitigate the downside risk that may arise from volatility in equity. BSL Equity Savings Fund is one such hybrid proposition which provides the best of three worlds, not just two:

· The potential upside & kicker of equity

· Stable interest income from Debt

· Low volatility equity arbitrage

Along with the above benefits, the cherry on the pie is tax efficiency (equity taxation). Hence, the key differentiator of this product is that it is an efficient mix of the 3 strategies providing opportunities to participate in market upside while restricting the downside with lower volatility.

In the Hybrid Category, Birla SunLife Equity Savings Fund features more as a debt oriented hybrid which is slightly more aggressive than a MIP fund but less aggressive than BAF kind of offering. Hence, as an investment proposition, the fund is at a sweet spot for conservative equity investors. Being a debt oriented hybrid offering, the fund endeavours to pay regular dividends to its investors. The fund has been paying out regular quarterly dividend for the last one year. In the last one year the average annual dividend yield is in the range of 6% – 8%.

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

Top 10 Tax Saver Mutual Funds for 2017 – 2018

Best 10 ELSS Mutual Funds to Invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Tata India Tax Savings Fund

3. Birla Sun Life Tax Relief 96

4. ICICI Prudential Long Term Equity Fund

5. Invesco India Tax Plan

6. Franklin India TaxShield

7. Reliance Tax Saver (ELSS) Fund

8. BNP Paribas Long Term Equity Fund

9. Axis Tax Saver Fund

10. Sundaram Diversified Equity Fund

Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

OR

Call us on 94 8300 8300

Aditya Birla Sun Life Resurgent India Fund Series

Aditya Birla Sun Life Resurgent India Fund Series Online

In 2018, the world economy is expected to grow at 3.6%*whereas India is expected to grow at a faster rate of 7.6%, which is much higher than the growth rate of developed and emerging economies.

Presenting, Aditya Birla Sun Life Resurgent India Fund – Series 5 (A close ended Equity Scheme) that aims to tap in the potential of these growing sectors by investing primarily in equity and equity related securities that are likely to benefit from the recovery in the India economy. The 3 themes for India’s economic resurgence revolves around Infra Spend, GST & Affordable Housing.

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

OR

Call us on 94 8300 8300