Sip presentation

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SYSTEMATIC INVESTMENT PLAN
Submitted By :
Sudarshan poojary
DPGD/AP12/1061
Prin. L.N. Welingkar institute of Management
Development & Research

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What is a SIP ?
 SIP means Systematic investment Plan
 It is one of the ways to Invest in Mutual Funds
 Through SIP you can invest in mutual Funds
in small investment on a monthly basis
 The investment is done directly by debiting
your bank account on a specified date
 You can start your SIP by filling up a simple
SIP form and providing bank auto debit
Mandate.

3. Things you should know about SIP
 Your SIP does not stop if you miss an
installment
 The AMC does not charge you any money for
missing an installment
 Your bank however, may charge you as per
banks policies
 All SIPs are done in open ended funds
 There is no lock in for your SIPs ( except tax
saving)3

4. Features of SIP
 Affordable to small investors
 Low market risk through rupee cost averaging
 Compounding effect
 Easy liquidity
 Easy mode of Payment
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5. Advantages of SIP
 It is entirely mechanized process and involves
no complications
 Investments are consistent and steady
 Power of Rupee Cost Average : Market’s
volatility shall work wonders for you.
 It enables to over come spending and
encourage savings, thereby securing future
 It will not cause strain on one’s budget as
amount invested is very less5

6. Disadvantages of SIP
 Limited options of dates.
 Way out
 Fixed amount
 Stopping intermediate payment:
 Lot of delay between actual application &
start/stop of SIP:
 Does not suit people with unpredictable cash
flows
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7. Disadvantages of SIP
 Portfolio risk remains
 Ignore the market Swings
 Periodical review of investments
 Timeframe for the Mutual Fund SIP:
 Contribution towards Mutual Fund SIP Changes
 Portfolio Review and Mutual Fund SIP
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Why Invest ?
 Children’s education / marriage
 Medical Emergency
 Retirement
 Aspirational goals – House , Foreign Holiday
 Other Obligations

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 The lower interest rates over the years have been worrying
him.
 He decides to take the help of Sreeni , financial advisor.
 After carefully evaluating his financial goals and time required
to achieve his financial goals , he advises him to invest in
equity mutual funds for following reasons
— Portfolio diversification
— Superior returns ( refer slide on cumulative annualized returns
for different asset classes for details )
Systematic Investment Plan

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 However, Anil is not comfortable investing into equity
mutual funds as they are volatile and therefore risky
and avoidable.
 Sreeni advises Mahesh to register for Systematic
Investment Plan (SIP) and make use of volatility in
the market rather than get worried and avoid
investing in equity mutual funds.
 Anil is not clear as to how SIP will work to his
advantage and requests for more details
 Sreeni explains as follows :
Systematic Investment Plan

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Systematic Investment, An
example
 Rahul & Viru are two friends. Rahul decides to invest using SIP
whereas Viru decides to make lump sum investment.

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Systematic investing , An example

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Systematic Investing, An example

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Why Systematic Investing?
 The Goal of most investors is to buy when the
prices are low, and sell when the prices are
high.
 Sounds simple, but trying to time the market
like this is :
1. Time Consuming
2. Risky
3. And almost Impossible
 A more successful strategy is to adopt
Rupee Cost Averaging.

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Three common reasons for not
investing
 I don’t have enough money to invest
 I am too busy making money to worry about managing
it
 I don’t have the time or expertise to follow the market
movements and make investments at the right time.
SYSTEMATIC INVESTMENT PLAN
is the only answer to all reasons.

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How to make Sip work for you ?
Set your financial goals
Identify the scheme
Decide the SIP amount
Look for a long term commitment
Aim for the big picture
Start investing.

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Thank You