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Mutual Fund is An excellent investment option to park your funds for professional management, diversification of risk, maximization of returns and least effective tax liability as compared to any other investment options. Even when your investment horizon is for a few days, mutual funds investment will earn for you.
You can invest in Mutual Fund By various
ways, you can invest at one time or on monthly basis.
The concept of invest monthly is called SIP (Systematic
Investment Plan).
SIP :: An SIP allows you to take part in the stock market without trying to second-guess its movements.
An SIP means you commit yourself to investing a fixed amount every month. Let's say it is Rs 1,000.
When the Market price of shares fall, the investor benefits by purchasing more units; and is protected by purchasing less when the price rises. Thus the average cost of units is always closer to the lower end[see Dollar cost averaging].) { NAV : Net Asset Value , or the price of one unit of a fund. Can be computed as follows : NAV = [ market value of all the investments in the fund + current assets + deposits - liabilities ] divided by the number of units outstanding.}
| Date |
NAV |
Approx
number of units you will get at Rs. 1000 |
| Jan
1 |
10 |
100 |
| Feb
1 |
10.5 |
95.23 |
| Mar
1 |
11 |
90.90 |
| Apr
1 |
9.5 |
105.26 |
| May
1 |
9 |
111.11 |
| Jun
1 |
11.5 |
86.95 |
Within six months, you would have 5,89.45 units by investing just Rs 1,000 every month.
Over the long run, you make money
Let's say you invested in Prudential ICICI Technology Fund during the dotcom and tech boom.
Say you began with Rs 1,000 and kept investing Rs 1,000 every month. This would be the result:
Investment period
Mar 2000 Mar 2005
Monthly investment
Rs 1,000
Total amount invested
Rs 61,000
Value of investment of Mar 7, 2005
Rs 1,09,315
Return on investment
23.87%
Had you bought the units on March 13, 2000 at Rs 10.88 per unit (that was the NAV then), you would have lost because the NAV was just 7.04 on March 7, 2005. But because you spaced out your investment, you won.
We deal with all kind of Mutual Fund
Houses.
1. Reliance Mutual Fund
2. ICICI Prudential Mutual Fund
3. HDFC Mutual Fund
4. HSBC Mutual Fund
5. JM Mutual Fund
6. SBI Mutual Fund
7. DSP Blackrock Mutual Fund
8. Axis Mutual Fund.
etc....
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