what is sip? (systematic investment planning) slideshare
DESCRIPTION
Systematic Investment Plan (SIP) is an approach to investing small amounts at regular intervals rather than investing lump sum amount at one time. Considered to be the safest way to invest into Equity Markets by going the SIP route, Investor is not trying to capture the Highs and lows of the market, but trying to average the cost by investing at regular interval. Concept is that, When the markets fall investor gets more units. Likewise investor acquires lesser units when the market goes up. This means that investor buys less when the price is high and investor buys more when the price is low. Hence the average cost per unit falls down over a period of time.TRANSCRIPT
What is SIP?
Systematic Investment Plan (SIP) is an approach to investing small amounts at
regular intervals rather than investing lump sum amount at one time.
Considered to be the safest way to invest into Equity Markets by going the SIP route,
Investor is not trying to capture the Highs and lows of the market, but trying to
average the cost by investing at regular interval.
Concept is that, When the markets fall investor gets more units. Likewise investor
acquires lesser units when the market goes up. This means that investor buys less
when the price is high and investor buys more when the price is low. Hence the
average cost per unit falls down over a period of time.
2010
2011
2012
2013
2014
SENSEX 21000
January 2008
SENSEX 9000
February 2009
SENSEX 15000
January 2012
SENSEX 25000
June 2014
Rs.500/ Monthly - SIP from January - 2008 to June - 2014
Total Amount invested = Rs. 39,000/-
After 6.5 years Amount Corpus = Rs. 60,000/-
SENSEX 21000
January 2008
SENSEX 9000
February 2009
SENSEX 15000
June2011
Rs.500/- Monthly in SIP from January - 2008 to June - 2011
Total Amount invested = Rs.21,000/-
After 3.5 years Amount Corpus = Rs. 26,000/-
Getting carried away with market sentiments
Word of Mouth
Liquidity Crisis
Wanting to Shift Investments to Safe Heaven Assets like
Bank Deposits.
Deteriorating Performance during falling market.
Mr. A stayed invested from 2008 to 2014 where he generatedgreater corpus than Ms. B.
Ms. B, due to fear of Falling Market moved out ofSIP Investments in 2011 itself, due to which shegenerated lesser corpus as compared to Mr. A.
This concludes that an Investor must remain invested for a long tenure irrespective of the market scenario in order to generate large corpus.
