Magic of SIP in Mutual funds , Part 1

POSTED BY Jagoinvestor ON March 1, 2009 COMMENTS (119)

Numbers Speak !!

Today we will see some characteristics of SIP (Systematic investment plans) . this is first part of this article, we will have part 2 of this as well where we will discuss other important things about SIP.

SIP - Systematic Investment Plan


Assumption :

We are assuming that investments were started from year 2007, It has both a part of Bull markets and Bear market, So i chose that time frame.

Let us first see an example where investment was made in NIFTY ETF’s. There are two friends Ajay and Robert. Both of them want to invest Rs.50,000 in markets with 2 yrs of time frame in mind. Both of them do not have that much cash in the start.

Robert believes that Markets are in Bull run and hence it has good chances of Capital appreciation. He does not want to miss this chance and decides to borrow money on loan from friends and family or personal loan and invest it.

What are his Characteristics at this point?

Its just like any normal, average investor, where investment decisions are based on emotions, without foresight and too narrow. They do not understand the cycles of market and they do not understand that markets moves up and down in every time frame.

On the other hand Ajay is an informed investor and does understand cycles of Market, He knows that markets run from up to down and the bull market which started in 2003-04 has already run a long way and can turn any time now. He understands that its a better idea at this point to not get into debt to invest in stock markets. He controls his Greed and will invest only what he has. Also he decided to invest 50,000 in 2 yrs. but a small amount month by money systematically.

Now lets see the capital appreciation which happened for both of them.

Summary :

Robert invest full 50k in the start around Jan 2007 with 2 yrs of time frame. Ajay also decides to invest the same amount but he breaks it in smaller chunks and wants to do it using SIP on his own.

Monthly Investment Growth in NIFTY ETF from Jan 07 – Jan 09 for Rs.50000

Lets look at what happened ?

Markets continue to rise and Robert sees his investments grow from 50k to 75k within a year. Ajay also sees his money grow to 35k, on an investment of 25k. If you see at this point, Robert has made very great returns on his investment compared to Ajay.

But after that see what happened. Markets started going down and investment of Robert kept coming down with markets and at the end it was at 35k. With Ajay it was a different case. His investments went up and down both sides and finally ended at same point at 35k.

What is Drawdown ?

Drawdown is the drop in the value of investments from its High. If 10k investment go up to 15k and then fall back to 12k. The drawdown is High(15k) – Lowest point after that (12k) = 3k, OR 20% drawdown.

Things to notice

Roberts Portfolio :

You can see the behavior of Robert’s investments. It was too volatile. You can see it going up and down and here and there. I am not saying that it didn’t move and made profits, It made good profits at one point of time, but Robert must be smart enough and courageous to take his profits even if markets are going up and there are chances of making more.

People who want “more” and “more”, eventually not even get “what they had”. Have a target and BANG !! Once it moves at that point, be unemotional and take the profits. Markets is a place where money is flesh and everyone is Vultures. If you leave it open for a long time, It will be taken by some one of other.

The other thing is Psychological issue.

Because investment moved so high, and then so low, Robert must be feeling bad and too conscious. He must be regretting a lot on not taking the profits. This has bad effects on investment decisions.

Roberts Drawdown :

His 50k goes up to 75k (high) and then it moves down to 38k. Draw down of 41k which is 49.3%, this can have devastating affect mentally, as one sees his investment grow to 75k and then drop to 38k and finally end at same point 38k after some volatile movement up and down.

Ajay Portfolio :

You can see the consistency of Ajay portfolio. It moved up and up all year whee markets where rising. and once markets started going down and was volatile, his portfolio was also volatile, but not very high, Its volatility was very low and finally it was almost at the same point as in the start of the year.

Infact you can see that his portfolio was rising still when Roberts was declining.

Ajay’s Drawdown :

This highest Drawdown seen by Ajay portfolio was from high of 39k (20th payment) to low of 35k, which is just 10.25% drawdown. You can get a feel, How difficult or easy it must be for Ajay to see this.

The point here is not Who made more money or Lost more. Infact you can see that they both were in loss of 12k on an investment of Rs.50k, But the journey was not same for both of them.

While Robert worked too hard and saw wild swings. Ajay made systematic investment and continuously saw his money go up only with minor drawdowns, which was easy to handle psychologically. This is true for any investments weather it is Shares, Mutual funds or ULIPS investments.

Now’s let see and example for the same period, weather these two same investors have made investment in UNITECH.


I have taken this example because it shows what I want to show, the power of systematic investment. Here both of them are investing Rs.1,00,000 (1 lac) in Shares of Unitech. Roberts invests 1 lac in the start of Jan 2007, where as Ajay makes weekly investment of a fixed amount in such a way that it adds up to Rs.1,00,000 at the end of 2 yrs.

You can see the behaviour of portfolio for both of them.


Investment : Rs.1,00,000
Mode : One time investment
Final Value : Rs 9,000
Time frame : 2 yrs
Drawdown : 91% (Rs 1 lac , from high of 1.1 lacs to low of 10k)


investment : Rs.1,00,000
Mode : Weekly investment (weekly SIP by self)
Final Value : Rs.42,000
Time frame : 2 yrs
Drawdown : 70% (28k, from high of 40k to low of 12k)

Weekly Investment Growth in UNITECH from Mar 08 – Feb 09 for Rs.1,00,000

Conclusion :

Now the main question? What is good One time investment or SIP? The answer is both are good inp different conditions, and it depends on your Risk appetite too.

When you don’t have clear indication of trend and are not sure where markets can go, the best idea is to invest through SIP. That will save you from volatile markets and small down moves too.

SIP will definitely miss out on returns in BULL markets. But it will work best in Volatile markets and falling markets. SIP is not a way to avoid losses, its a way of investing, where you feel more disciplined and average your cost of investment of long term.

Watch this video to know the magic of SIP:

The examples I have taken were biased because of the idea I wanted to communicate.

Anyone who did one time investment in 2004 would have made more money than someone with SIP, till 2007 at least because of the rising markets.

You must have seen in first example that Ajay’s portfolio was at 35k in the start of 35k, and even at the end of 2009, it was at same point even though markets fell from 20,000 levels to 10k levels and was too volatile, there comes the power if SIP (the money you pump in fights the falls in markets at least).

Part 2 : This is first part of this article, we will have part 2 of this as well where we will discuss other issues and things regarding the second example we took (UNITECH)

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Also, why don’t you guys and gals leave me messages and comments, please put your comments with your views on article and your own ideas, I should also get chance to learn from you all, don’t I?

Read continuation Part 2 of this post here

119 replies on this article “Magic of SIP in Mutual funds , Part 1”

  1. Partha says:

    Sir,I am thinking to invest Rs1500 per month for coming 05years through SIP in SBI blue Chip mutual fund.would it prove good for me?how much can l except out of my total investment after 05 yrs? I am a new investor.

    1. Yea .. 5 yrs SIP can give you good returns, but its not a fixed number but a range. You can expect an average of 10-15% returns , but thats again depends on market movements.

      We can help you setup the SIP in mutual funds and can choose right funds for you. You can look at our Pro membership –


  2. Satyanarayan says:

    Sir, I would like to invest Rs.20000/month in SIP. But i want partial money after 2 years (around 15000/month). But SIP will continue (Rs.20000/mth) for long term.
    Kindly suggest me how to invest 20000 in different funds with above mentioned cretaria.

    1. You can withdraw the money when you want.

  3. Rohit says:


    Needed your suggestion on my current MF portfolio and future plan:

    Current- Total Rs 10,000 monthly

    1) HDFC Top 200- Rs 2500
    2) HDFC Prudence- Rs 2500
    3) HDFC Balanced- Rs 2500
    4) IDFC Premier Equity A- Rs 2500

    Going forward- plan is to invest Rs 25,000 monthly. Investment horizon atleast 20 years- I am 34 now.

    a) Are the above MFs ok? HDFC Top 200 has been a laggard- should I continue or stay invested?
    b) I understand I am invested in two balanced funds- hdfc prudence and hdfc balanced- should I exit one or continue investing in both? Should I increase my contri?
    c) If I look at HDFC Top 200, balanced and prudence- am I right to say that I am overinvested in large caps ( ignoring the debt allocations of large caps) and trying to overheadge myself? I am 34 years now
    d) I like HDFC stable- moreover I am an NRI and already created HDFC Direct account- so easier to open a new SIP through HDFC- am I being foolish by investing only in HDFC AMC?
    e) I am planning to invest additional Rs 15,000 per month in SIPs and I am building a retirement corpus. Would adding more large cap and mid cap fund be good? my plans are as follows:

    – HDFC Midcap- Rs 2500
    – Sundaram Select Midecap- Rs 5000
    – Franklin bluechip- Rs 2500
    – Any others (including increasing SIPs in exisiting MFs….would like to add varied and MFs which divrsify my porotfolio and gives aggressive returns….)- Rs 5000
    – For debt- I am looking at PPF + NRE fixed deposits 1-2 years (both tax free)- should I consider liquid/ short term debt mfs?

    Looking for your kind reply

    1. Hi Rohit

      I think HDFC top 200 is still a great fund. You can stop it if you personally feel that it has lost its steam

      Also your new funds are good enough especially Franklin Bluechip and HDFC midcap opportinies !

  4. Sagar says:

    Hi Manish,
    I have read all the discussion above and seeking some suggestion from you on investing in these MF’s. I want to invest on some MF’s through SIP (Planning to have one). I am looking for short-term investments and I can invest a Max of 1500/- per month. is there a process I can operate my SIP through online(put my monthly investment/buy or sell any MF’s at a time when NAV is high for it/Do I need to have multiple SIP’s if I plan to invest in multiple MF’s). Please try to spare some time for my query and help me in finding answers to my doubts and also please tell me that is this the right time to invest in the market?

    Thanks in advance for your help/suggestion.

    1. You are actually looking for something like “Flexi-SIP” where you can choose a high amount or low amount on a click of button . This is availabel with


  5. Chetan Ambi says:

    thought provoking article on Magic of SIP. After reading your articles I got convinced to invest in Equity (based on my risk appetite) and PPF. My SIP’s are running from last 3 months and I am happy with it. Jagoinvestor really woke up an investor in me :).. I have both the books written by you and they are like mini encyclopedia to me. Planning to buy Nandish’s book as well soon..

    1. Great .. buy the nandish book and you will be amazed πŸ™‚

  6. K C Rana says:

    Hi Manish,

    I am a salaried person and have started SIP in two MFs. But recently I have come to know about VIP benifits.
    Should I switch to VIP technique and do it manually by myself?

    Thanks & Regards,
    K C Rana

    1. I dont think so .. VIP is still at nascent stage and just because its new thing, you should not switch from it . You better continue with SIP and check out VIP investing for some amount as of now

  7. krishna says:

    Hello Manish…..

    at first thank u a lot for your valuable info. i want to invest in ur proposed SIP.
    but, first i want to know where to go to invest in SIP mode and what are its return methods. can i withdraw my profit from SIP at anytime??? Don’t mind, for my ignorance,as i’m a novice to these investment types…so plz consider above queries…

    1. Hi Krishna

      You can invest in mutual funds SIP through various means discussed here – and also ask all your questions on our forum to learn –

  8. Srinivengala says:

    Hi Manish,

    I have been investing in the mutual funds since more than a year. The selected Direct funds are HDFC balanced growth fund, franklin templeton india bluechip growth fund. my plan is to invest for more than 10 years. i am planning to add more funds like Quantum long term equity growth fund, HDFC Mid-Cap Opportunities
    and IDFC Premier Equity. my risk appetite is average (more into conservative type), however i want to accumulate more money through MFs. can you take a look at my portfolio and guide me if i am wrong?

    1. I think you are investing in more than required funds, Just have any 2 funds . I would say HDFC balanced and Quantum are good one’s .

  9. Sameer says:

    Hi Manish,

    I am planning to go with “SBI Emerging Businesses Fund (G)” for a long term as a SIP (2000 per month). If this is the right decision to go with this fund? Or i need to select a differ one. Please suggest.


    1. How old this fund is ?

      1. Sameer says:

        It was launched on 17 sep 2004.

  10. Sameer Goel says:

    Hi Manish,

    Hope you are doing well. Manish could you please help me to select a mutual fund to invest in gold i.e. Gold ETF. I want to invest in it as a sip of 1000 Rs.

    Please Help!


    1. For gold ETF, you can just go with Kotak ETF or Benchmark

  11. Sameer Goel says:

    Hi Manish,

    Thanks for providing such the valuable information for the new investor.

    Manish, i have a confusion regarding the “Compounding Power” in Mutual Fund. For example i started to invest 1000 Rs per month at a NAV rate of 500. After the ten years, my capital amount will 12000 and the NAV value is 550.

    At this time i have a total of 250 units. And if i will redee it the value that i received will be 550*250 = 137500.

    It means i achived only 137500-120000 = 17500.

    Could you please confirm on my calculation.

    Many Thanks,

      1. Sameer says:

        Thanks i will check the video.

      2. Sameer Goel says:

        Hi Manish,

        I checked the video but my question is still the same “compounding power”in mutual fund.

        Through the video we can estimate the return ratio, But in mutual fund we dont know the estimated return.

        Could you please help me in understanding the compounding power with an small example.

        Many thanks in advance,

        1. Sameer says:

          Hi Manish,

          PLease help me to understand this.


  12. radhe says:

    Nicely written , My manydoubts were clear.

  13. ankit says:

    After going through your website i started taking SIP seriously, recently i took Axis triple advantage – growth fund and started investing 1000/pm for a tenure of 3 years . Is long term investment is possible in MF – (equity and growth). Can i continue with my fund for next 15 years depending upon its performance . Pls reply soon…..

    1. The fund you have is not an aggressive fund, it takes a balanced approach and will have balanced return and risk potential , if thats your motive , then you can invest in it, also its too new fund, cant comment on it right now with such a small track

      1. ankit says:

        Thanks Manish….. Could you suggest what factors need to keep in mind to buy a new fund?

        1. Just make sure that they are pure equity funds if you are investing for long term . And those have a consistent record

  14. sushmita says:

    Awesome!!! lovely lovely lovely article!!! you are doing a great favor to people like us who get caught in the fear in security and end up investing in wrong policies!!! cannot thank you enough!

  15. Sameer Goel says:

    Hi Manish,

    As a new investor, i want to start with HDFC Prudence (G) fund with a 1500 sip for 10 yrs. Could you please let me know if i have taken a right decision on this fund?

    Many thanks in advance,
    Sameer Goel

    1. Sameer

      Its a really good fund, you can continue it !

      1. Sameer Goel says:


  16. Sameer Goel says:

    Hi Manish,

    3 yrs back, i purchased a birla dream plan. This is a Individual Life – Enhancer (ULIF00213/03/01BSLENHANCE109) plan. Fund type is SFIN. I am investing 1000 rs per month for this. But when i checked the fund value at present, it is showing just around 24000 while around 38000 i have already paid. In the three yrs i am in loss of 14000 rs.

    Could you please suggest me should i continue with this plan or withdraw it?

    Many thanks in advance.

    Sameer Goel

    1. Sameer

      The loss is because of bad performance of market (might not be the fund) and the high charges . You can get out of it, if you feel its not serving you.


      1. Sameer Goel says:

        Thanks Manish.

  17. Sameer Goel says:

    Hi Manish,

    First of all thank you so much for providing the readers such a valuable information.

    Myself Sameer Goel, age 31 married and have a daughter. I have a term insurance of around 35 lacks and a couple of LIC policies.

    I have read a lot about magic of SIP in mutual fund. Now i want to go with that.

    FYI: I am just a new candidate entered in the mutual fund class and i dont know any thing on it. Just have some information after reading your blogs. I wan to invest 1000 rs per month for a period of 10 yrs but want to go with a safe/very low risk fund (with a good return after 10 yrs).

    Could you please help me on this.

    Many Thanks,

    1. Sameer

      There is nothign like that .. very good return can only come when you take a risk , else FD is for you or debt mutual funds ,which will not deliver high returns .You should look at HDFC prudence fund a balanced fund to start with .

      1. Sameer Goel says:

        Thanks Manish. Could you please elaborate a little about the risk factor for 15 yrs term. Please let me know some of the funds on this.

  18. Madangopal says:

    Sorry I feel I have started reading your article to late, but it is good to get started at any point of time…

    1. Good that you started atleast , go through all the old articles and just go through them .

  19. ashutosh says:

    hiiiii,i am new to mutual funds and want to invest nearly 5000 in mutual funds through SIP and 2500 through gold etf.i have a long term investment perspective i.e.(>15 yrs).So.can u plz suggest some of the good funds.i have sorted out a few of them hdfc top 200,franklin india bluechip,hdfc prudence,sbi contra.can u also tell what is the procedure to redeem the investment if one want to do so……..

    1. Ashutosh

      You can invest in those funds which you have choosen , the redemption part is very simple , see

  20. bhawana says:

    Hi Manish,

    your articles are just great and full of all the info a beginner like me need. I am planning to invest and i have just started working. I earn 15k monthly but i want to start investing soon as i don’t have much expenses right now so i can afford to invest little amount regularly. But i have no clue on investments. Your guidance would be of great help.

    1. Bhawana

      First you should start learning about personal finance , this blog will be a good start , I also recommend you my book . You can start mutual funds SIP in some balanced funds

      1. bhawana says:

        can you please name some good balanced funds where i can invest and what amount should i invest?

  21. Chandrakant Rajolkar says:

    hello manish,
    i am planning to start SIP for long term (20-25 yrs), i dont know whether it is right question to ask or not, but i want to know the power of SIP, coz i heard from all, that SIP is good for long term, what is the approximate return on SIP for long term ? funds in my mind HDFC top 200, SBI FMCG
    please i need your assist.

  22. lokesh says:

    i couldn’t go through all of your posts for my question, i seek your help in this regard:
    Should we follow any principle/rule while doing SIP in mutual funds, though, we should not try to time the markets:
    1. If we chose monthly SIP, and NAV is fluctuating during the month, when to buy units?
    2. If we chose a particular date of the month for SIP, would it be a right choice?
    3. if NAV has gone higher by 50% should we book profits in MF units?
    4. if NAV is reducing (market is also going downwards) should we stop buying MF units?

    1. Lokesh

      the more longer your duration , the more inactive you should be . thats the rule , so if you are a 5-10 yrs + investor , I would say just start the SIP and then go back at your work !


  23. Sravi says:

    Hi Manish,

    As i’m new to this SIPs , i have a question in my mind. i started investing 5000 rs in SIP Hdfc top 200, Lets suppose down the lane 3 years if this MF is not working well( as a newbie , blindly following stars in value research) , then what i can do. Can i stop paying SIP premiums or withdraw the amount? but withdrawing is not the case as i am looking for long term (20 yrs).

    Please let me know what is the procedure to change to other MF if current MF is not working well.Thank you.


    1. Sravi

      If a mutual fund does not work (which has to be defined will on how to decide that) , then you need to stop it and start a new one . there is noting like “changing a MF” , you have to stop one and start another always

      Also you can stop your SIP anytime without any issue after 6 months .


  24. saurabh aggarwal says:

    thanks 4 dis article…a very well explained one ,as SIP was earlier greek to me….
    Thnx again

    1. Saurabh

      Nice to hear that πŸ™‚ . Keep coming

  25. Santosh Gupta says:

    Hi Manish,

    I have invested 1,60,000/- in 8 different tax saving Mutual Funds in 2007 and 2008. So far i have accumulated more than 40,000/- as dividends from all the 8 funds. Recently I have calculated the number of units I bought and the current NAV, to my surprise the current market value is 1,26,000/-. Should I keep them or sell? I am an average investor and my knowledge in money market is poor. Please suggest.

    1. Santosh

      the dividends you get from MF are your own money which is paid back to you ,. and then NAV is decresed by that much quantum . So i think its fine .. the markets have not done that well in last 2-3 yrs as a whole , so dont feel bad .. its normal


  26. Ketan Sukani says:

    hi Manish,

    I would like to invest Rs 50,000 by march 2011 for tax saving and it should be for short time about 3 years max 5 years.

    Kindly advice for investment plans.



    1. Ketan

      You have options like ELSS , ULIP’s and Bank FD’s as their locking period ranges from 3-5 yrs . Make sure you understand the kind of returns you can get out of these .


  27. Sanjeev says:

    I want to make my good Portfolio but do not have any idea where to invest. I can say my monthly income approx 50K
    my investment
    the endowment assurance policy — 9384 /Year
    Jeevan Saral Pno 165 — 30025 /Year
    SBI Horizon II — 12000 /Year
    If i do not have my own choice would you able to suggest me how can i make a good financial Portfolio

    1. Sanjeev

      The best thing would be to get rid of all the junk things you have collected right now and do goal based investing , you need to hire a financial planner incase you are not interested in learning and want it fixed asap


  28. Prasant says:

    Hi Manish

    I once had a glance of this page mid last year. I thought visiting this page again to get an advise and forgot the address obviously because of not coming back again and did a lot of search to get this back. One cannot stop appreciating you once went through your article. Now, I need advise!
    I got 2lakhs of amount recently and I want that to get multiplied but not aware of the recent market and mutual fund trend. Thinking of national bank FD but was not happy seeing the interest rates, ofcourse, that is safe and secure but my appetite is little more. Family is insisting on FD even me too as I am unsure and illiteraete about MFs and the market rates but I want something more. Planning to put that min. 5 can you advise me the secured MF otherwise I would go with family.

    Thanks in advance and appreciate your effort in responding to all queries.

    1. Prashant

      From your comment I can make out that you would be comfortable with 2-3% more than FD for short . So given the current market situation you should not get into equity , right now you can invest in debt oriented funds which will have 15-25% in equity , so invest in UTI Mahila unit scheme on your wife/mothers name (women only) and and some part in FD (for 1 yrs) . Once markets fall in 6 months/1yr/2 yrs (you dont know when it happens) , but when it happens , muster all your courage and when it seems the worst time , just go and put all the money in equity mutual funds and then wait for next 2 yrs , I can see money doubling in 5 yr (thats 14-15% return overall)


  29. manish vaid says:

    Hi manish

    Can you let me know how STP works…any article on STP..


    manish vaid

  30. Mahesh says:

    Hi Manish,
    I have some question while investing in MF.. I think i have read all article related to SIP but still one question i have and for that i need ur advice .
    I have not invested anything in MF till now and very new to this.
    Actually i want to know which way is better via sip or via manually by seeing the market. Not totally relying on market but like for eg. yesterday i saw the market was high and if i think to invest it after some days when it will go down atleast sensex come on the average level. I am not good to understand the market but atleast i can see the sensex and then invest. For all months i if i follow the same way then i think it will help me to give good returns .
    Please let me know if am thinking in right way or there is any problem in it…

    1. Mahesh

      Investing directly takes a good amount of understanding and comes with years of understanding and experience , atleast some good months , So if you are ready to learn , why not .. go ahead and try to see if you can do it with yourself .


      1. Mahesh says:

        Thanks Manish for the advice. Also saving into MF manually will have little bit flexibility like if I am not able to adjust a specific monthly amount this month then i will adjust it in next month πŸ™‚
        Thanks again ..all you articles are really helpful and i have started educating my self more and more in it.

        1. Mahesh

          Just make sure that doing monthly investments brings in Emotions and people tend to start timing the market . Dont let it happen, rest all is good πŸ™‚


          1. Mahesh says:

            Then in SIP case i agree we will not have to see the market at all but what if whenever our monthly amount is deducted and unfortunately every time market is up then i think it will surely give me less return ..Right ??

            1. Right

              But do you think this can happen for several months or years :0 . think from 2-3 yrs point


            2. Mahesh says:

              Yes i think i can because i am a Network Engg and continuously on laptop and always online as internet is πŸ™‚ so daily i can take out 10 mins at least to check the market. I am not sure if i will go the way i am thinking but 90% via SIP only ..he he ..thanks for your advice. I have a big question for my LIC policy but will ask on your Jeevan Tarang article.
              Thanks for your help & God bless you.

  31. Hitesh says:


    As read on ur blog , we can miss out the profits on bullish market, how can i decide in my case whether to switch over to other fund or continue.
    I have invested in HDFC top 200 as sip since last four months and started it as long term investment for my child’s education. following are four NAV
    April – 184.44 5.42
    May – 175.860 5.68
    June – 192.23 5.20
    July – 199.11 5.02
    Now the markets seems to be bearish, so should i switch over or continue keeping long term in mind ?

    1. Hitesh

      Its a tough thing to answer , it takes a lot of experience and effort to find out when you should switch .

      So if you feel its bearish , its fine , but it can keep going up for more time and you might regret the decision , its all risk πŸ™‚


      1. Hitesh says:

        Thanks for the quick reply

  32. milind says:

    Hi manish,

    this is my first comment on this blog. Read few articles and they are excellent and informative.

    With MF using SIP makes sense however would like to know your thoughts on VIP(Value-averaging investing plan).



    1. Milind

      Thanks πŸ™‚ . VIP is a new concept and looks promising in most of the situations , however there is no guarantee that it will outperform SIP in all the cases . You can try our VIP . Dont over judge it .


  33. Amol says:

    Hi Manish,

    This is one of the finest and worth reading article. One question on this.
    I just saw SIP calculator that you have in your ‘Calculators’ section of this website(

    Can one use it for the investment SIP he does in Mutual funds per month through SIP route ? Will it be a correct way of calculating the future value(specific to MF invest. per month). Please advice


    1. Amol

      yes , you can use it , i have created it for that only πŸ™‚


  34. raj says:

    Hi manish ,
    I want to start sip in following mf (sbi )
    1.Magnum Balanced Fund
    2. Magnum Multiplier Plus 1993
    3.SBI Blue Chip Fund

    I need ur valuable advice …. Is it balance portfolio
    My current investment in
    Reliance regular saving . G @ 25k
    Uti master share G @ 30k
    Ppf @50k /y

    1. raj says:

      manish ,

      waiting 4 reply bossssssssssss πŸ™

      1. Raj

        Looks good . however I would encourage you to analyse things yourself , there are enough material on the blog now .


        1. raj says:

          plz booosss

          suggest me out of 3 for start sip …. which u w’ll per-fer me …

          waiting 4 reply sooooooonn plz …

  35. Sumanta says:

    Yes Sip is only one way to reach your Goal.

    1. sumanta

      Thanks for comment , would like to hear your views on SIP more .


  36. ronak says:


    really gud article.. so plz suggest me is this right time 2 start sip … boz market move up side .. any time will com down … i am very confuse ..

    plz suggest me some equity m.f..

    1. Ronak

      SIP is there because we dont want to time the market .. anytime is good for SIP , its there to obsorb the volatility πŸ™‚


  37. kavita kamat says:

    hi manish,

    it is really refreshing to read all the articles from ur blog regarging investing. i am a housewife, but i really save my time to read all the articles so as to get knowledge on investing. Thanks a lot.

    1. Kavita

      Nice to hear that , let me know if you face any questions .


  38. Shefali says:

    Dear Manish,

    You are such a star! and i cannot thank you enough for educating us in such a simple and open manner. I am really grateful to you. I discovered your site about 7-8 days back and am just glued to it. Have already emailed your link to all my fam and friends. I am sure they will take benefit of it.

    Thanks once again and best wishes always. Dil se… πŸ™‚

    Shefali Bajaj

    1. manish says:


      I cant be more glad to receive such a nice appreciation mail πŸ™‚ . have a look at other articles from I hope to see more participation from you on the articles here.

      Have a nice day .. shoot me an email for any queries .


  39. Ravindra says:

    Hi manish
    nice article Do you have any link where you discussed SIP vs VCA( Value cost avereging) type investment. Some times back i did the same but presently i have only SIP as the none of the MF provides VCA method of investing.. Few days back one my friend told m e some fund have started VCA method of investing.. Can you are any one here tell me exactly which fund is providing VCA method of investing??

    Thanks Nowdays i am enjoying your articles…giving 1-2 hrs daily to read.. nice keep it up

    1. manish says:


      I havent Discussed it yet .. but i plan to discuss it soon πŸ™‚ . please wait πŸ™‚


  40. Manish Chauhan says:


    SBI contra is excellent fund with 26% CAGR return since inception . You can look for funds like these for long term wealth creation . make sure you do it for long term and dont get carried away for short term .

    I would not recommend to put lumpsum . The better thing would be to invest that lumpsum in a liquid fund and use STP to invest everymonth .


  41. mash says:

    hi manish
    thank you for such aprompt reply. i am just looking for a reliable fund with good track record. My idea is to start with a copus of 50000(one time ) and therafter rs 1000/ per month. i hd sbi magnum contra in mind…
    children are 4 years and 4 months respectively…idea is that they have some money when they turn 20.please point out observations if any.

  42. Manish Chauhan says:

    @Manoj (mash)

    Thanks for your words , You can start SIP in some good Equity diversified mutual funds (may be 3-4) . You can go for ELSS funds as it will help you save tax and its lock in period wont hurt you as you are doing this for long term (incase your 80C is not exhausted) .

    Some good funds i can suggest is (i hate this part)

    1. Birla Front line Equity
    2. DSPML top 100
    3. DSP Equity
    4. SBI magnum contra
    5. Sundaram select focus

    However , its you disciplined approch towards investing + Asset allocation + Portfolio rebalancing is what matters , no the fund selection .

    If you concentrating too much on fund selection , you are focusing at wrong place πŸ™‚


    1. Rishi Bhatia says:

      Dear Manish,

      Hope you are doing fine, actually i would like to clarify some of my doubts and required your help for my financial planning. Actually i m a married person age 27years my monthly salary is 60 K. i had a LIC policy of 7 Lacs coverage for which i m paying around 35 K yearly. I understand that i require a term plan of around 1 Crore for which i m planning and will go for it in one month time.

      Now all i want 2 know that i have made sudden MF investment Via SIP….

      1. Reliance Regular Saving 1500
      2. HDFC Top 200 @ 3000
      3. Reliance Growth Fund @ 1500
      4. Birla Frontline Growth Fund @ 1000
      5. Fidelity Equity Growth @ 1500.

      After having all the investment and my monthly expenses i m still remaining with around 15K in my pocket for which i need ur assistance to where to invest do u have some other MF other than the one i invested and could u please suggest the way i invested in MF is right or do i need to make some changes. Other then this i invested 30000 Each in my and my wife PPF Account.

  43. mash says:

    dear manish,
    i am a great fan of ur writing style as well as the hardwork and commitment you put in to present your ideas ..powerful and simple..
    i am planning to subscribe SIP for my children for next 20 years…would you please recommend a Mutual fund?
    I am looking for reliability and returns. πŸ™‚

  44. Manish Chauhan says:


    if you see my first comment , i clearly say that "each payment" will be locked for next 3 yrs. so anything paid in Jan will be available in Jan after 3 yrs , Feb in Feb , like that ,

    Its ok to do SIP that way and get money in parts , rather than first wait to save all money and then put , you will anywyas loose time .

    And SIP is recommended as it will help you ride the volatility .



  45. Abimanu says:

    Hi manish ,
    Thanks for info,

    But my doubt is not clear
    in SIP through ELSS investment is made for 3 years
    i.e after completion of 3 years , can i redeem total units ,
    or only units alloted in First month will be redeem ,

    yes,i am confused about this

  46. Manish Chauhan says:


    First thing is that may be you are confused with the terms a bit .

    SIP is just a way to invest monthly, not a product .

    ELLS are the category of MF where you have 3 yrs lock in and they are for tax saving .

    Coming to your doubts

    1. You are talking about SIP in ELSS . Yes each payment will be locked for 3 yrs .

    Whats the use ? If you are ready to first save all the money and then invest in one go ,so that you get it back in one go at the end of 3 yrs , you can do that . But it will work out to be same .

    2. This question was result of confusion i beleive , ELSS have lock in period of 3 yrs , during that time you cant do anything . After that you can take decision of selling it or keeping it . depends on you .

    Am i clear ? Are your questions answered ?


  47. Abimanu says:

    Hi Manish ,

    1) i had heared that in SIP we can't withdraw money after completion of 3 years lock-in period,
    ex: if SIp taken in 2006 Aug , then in 2009 aug is it not possible withdraw full units of amount
    only amount invested in 2006 aug can take in aug 2009 , similarly Sept amount in sep2009 .
    is it TRUE ?? if it is what is use?
    2) wht about Mutual fund, in this lock-in period is 3 years, if at a that point of time
    NAV is low then we can stop withdraw amount and can take when NAV goes high

  48. Manish Chauhan says:

    Anu , First of all thanks to you .

    Long is atleast 5-6+ years . Any appreciation happens only after it is given some time to it . Today’s market conditios are so good to invest for 5+ yrs that you will not get this chance in next 10 yrs atleast . Each great company is available at great valuations at this point . Reliance is one example . one can invest in it for next 6 months a fixed amount every month because it would be volatile for some time .

    I will try to write something on this topic . No promises but .


  49. Anulopes / H Lopes says:

    Hi Manish,
    Another great article from you. I am reading your post for almost 7/8 months now and finds it very informative especially for a new comer like me.
    Everyone keep saying that it is better to be a longterm investor, which i am. But the only concern is how long it should be. or is it that you just put expample 1 lac now in some good shares and leave it untouched for another 5 yrs and encash them after 5 yrs. It will be great if you can write on this topic as well (when to encash your investments especially if it is share market related).

    Shall recomend to my friends, ofcourse. Such nice articles needs more readers, i do agree.

  50. Manish Chauhan says:


    I think the best thing for an average individual is to go for SIP . and this must be done with a long term time horizon .

    In long term there are many cycles seen by markets , markets are up , down and sideways , all of them .. So if someone wants to invest without considering whats happening in markets , SIP is the key …

    Keep coming back .. we have lot of great articles coming along .


  51. Anoop says:


    Idea of SIP is good. One important thing is that, leaving few situation, a salaried employee can only go for SIP. He is left with the money, after his monthly expenditure on home, and other things. That is the only option he has, whether he likes it or not.

    I really dont know how many people have lumpsom money (if they are working and depening on monthly salary) to invest. Suppose I am left with 10k per month to invest, either I do it monthly or wait for some time to invest lumpsum. So practically, in bull market, it is better to invest as early as possible, in bear market, the person can wait for sometime if he is sure or keep investing as it brings down the cost of investment, in voilatile market, it is anyway good.

    I feel that it is the only option letf to people like me whose source of income turns out to be monthly.

    For lumpsump investment, in bull market profit booking becomes very important. In case of bear, he is gone to the extent of the downfall and becomes forced long term investor (true for most people who wanted to earn quick money, but lost heavily).

    It has been very refreshing reading your article on investment.

    Three cheers to you.

  52. Manish Chauhan says:

    Thanks Nihar

    I am glad people like the article .. Keep coming.


  53. Anonymous says:

    I hv been a constant visitor 2 yr blog and find yr articles superb. Pls keep it up.

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