Hi,
I believe it’s best to have all the necessary ammo before getting any financial planning done. I’ve read a bit about SIPs and FDs and have a few questions:
1) Assuming we won’t get enough time usually to follow the markets, etc. I think SIPs for the long term and FDs for shorter terms are the best options for such people. Am I overlooking other promising investment tools – perhaps like gold, etc. or are they somehow covered in SIP?
2) is a 15% CAGR a conservative estimate for SIP for 10-15 years? Is it higher/lower based on anyone else’s experience here?
3) How do I research what SIP funds to invest in? I was browsing around some investment sites and there are about tens to fifties of MF funds! I think there are deeper problems here, similar to picking up stocks:
3.1) A diverse portfolio – I think there are debt, equity, gold. Is it considered bad to invest 33% of your monthly investment in each type? Also within each type, is a diversification necessary? I think diversification in investment is already handled by any single fund. Is there any harm in investing in too many SIPs, by keeping the total monthly investment constant, of course.
3.2) Timing the market – does it make any sense here? I expect better returns when markets are in a slump – “buying low and selling high”…right?(during the initial buying/investing of a fund)
3.3) Are there any websites to know how SIPs performed, get a list of the top performing SIP funds in the last decade, etc?
4) Lastly, what are your thoughts on VIPs? http://articles.economictimes.indiatimes.com/2011-05-23/news/29568997_1_investment-plan-investment-strategy-total-investment
PS: assuming this applies to investors younger than 23. I expect the portfolio to change with age.
Thanks in advance for your inputs.