Guide me regarding systematic investment plan.?
Answers: There are two ways in which you can invest in a mutual fund.
1. A one-time outright payment
2. Periodic investments
This is referred to as a SIP. (second one)
That means that, every month, you commit to investing, say, Rs 1,000 in your fund. At the end of a year, you would have invested Rs 12,000 in your fund.
Let's say the NAV on the day you invest in the first month is Rs 20; you will get 50 units.
The next month, the NAV is Rs 25. You will get 40 units.
The following month, the NAV is Rs 18. You will get 55.56 units.
So, after three months, you would have 145.56 units. On an average, you would have paid around Rs 21 per unit. This is because, when the NAV is high, you get fewer units per Rs 1,000. When the NAV falls, you get more units per Rs 1,000.
Here are some FAQs on the SIP
1. Is there a load?
An exit load is a fee you pay the fund when you sell the units, just like the entry load is a fee you pay when you buy the units.
Initially, funds never charged an entry load on SIPs. Now, however, a number of them do.
You will also have the check if there is an exit load. Generally, though, there is none. Also, if there is an entry load, an exit load will not be charged.
An exit load may be charged if you stop the SIP mid-way. Let's say you have a one-year SIP but discontinue after five months, then an exit load will be levied. These conditions will wary between mutual funds.
2. What is the minimum investment?
If you do a one time investment, the minimum amount that you have to invest is Rs 5,000.
If you invest via an SIP, the amount drops. Each fund has their own minimum amount. Some may keep it at least Rs 500 per month, others may keep it as Rs 1,000.
3. How often does one have to invest?
It would depend on the fund.
Some insist the SIP must be done every month. Others give you the option of investing once in three months or once in six months.
They also give fixed dates. So you will get the option of various dates and you will have to choose one. Let's say you are presented with these dates: 1, 10, 20 or 30. You can pick any one date.
If you pick the 10th of the month, then on that day, the amount you have decided to invest in the fund has to be credited to your mutual fund.
4. How will an SIP help?
When you buy the units of a fund, you may do so when the NAV is really high. For instance, let's say you bought the units of a fund when the bull run was at its peak, leading to a high NAV.
If the market dips after that, the value of your investments falls and you may have to wait for a long while to make a return on your investment. But, if you invest via a SIP, you do not commit the error of buying units when the market is at its peak. Since you are buying small amounts continuously, your investment will average out over a period of time.
You will end up buying some units at a high cost and some units a lower price. Over time, your chances of making a profit are much higher when compared to an one-time investment.
SIP means investing a fixed amount periodically (say monthly) in a selected investment avenue. Usually SIP is used with reference to Mutual Funds.
The advantages of SIP are
1) it helps us in saving money in a disciplined way.
2) Creates a large corpus without pinching ur pocket .
3) Helps to tide over the volatility of the stock market. i.e. achives Rupee Cost averaging .
Get intouch if u need more info.
Happy investing
What is ppf?
Answers: PPF stands for Public Provident Fund. It ia an investment tool where you get tax benefits and 8% annualized return.
Advantages
- Fixed 8% annual return
- Tax beneifits under 80C
Disadvantages
- Cannot take out money till 6 years
- After 6 years you can withdraw 50% of your amount
do you refer to an economic term? if so, it is defined asIn economics, a production possibilities frontier (PPF) or “transformation curve” is a graph that shows the different quantities of two goods that an economy (or agent) could efficiently produce with limited productive resources. Points along the curve describe the trade-off between the two goods, that is, the opportunity cost. Opportunity cost here measures how much an additional unit of one good costs in units forgone of the other good. The curve illustrates that increasing production of one good reduces maximum production of the other good as resources are transferred away from the other good.
its called Production Probability Fronteir
]just cllick the link sorry im not agood explainer but at last i;l provide you with an illustration inthe link i chose for you
In India it is PUBLIC PROVIDENT FUND.
A fixed amount of your salary will be deducted and paid into your account with this PPF which is A Government of India sector , The savings here attracts Interest for the Investment and is exempted from Income Tax under section 80C, Further you are allowed to with draw from this account after 6 years and finally upon your retirement you will be allowed to draw from this the entire amount.
This indirectly protect the employees future after retirement and is considered as a very successful savings method.
In addition to Government employees even private companies are entitled to deduct PPF and remit to the account.
ppf is Public Provident Fund.
Why after earn is declared, volume will increase but it's not associated beside significant move within theprice
When a firm announces its earnings for a interval, the volume of transactions in its stock may increase, but frequently that increase is not associated next to significant move in the price of the stock. Could someone please explain to me?Answers: Yes the actual returns are already anticipated and the increase in the stock is most normally built into the build up to the earnings anouncement. You will see yawning swings if the anouncement is off from the expected P/E (down if too low and up if much higher). EcNobody