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POSTED BY ON September 25, 2010 5:21 am COMMENTS (5)
Now stock market is at great bullish run again..!!! Understand SIP-MF are always safe.. but what about Normal Mutual Funds? Are they safe to invest in them these days?
— Manyam
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Now stock market is at great bullish run again..!!! Understand SIP-MF are always safe.. but what about Normal Mutual Funds? Are they safe to invest in them these days?
– Manyam
no,i donot agree with the view.
no body know the timing of bull run.
if someone is confident enough ,then why mutual fund ..go thru direct eqity.
oops, the above column is completely distorted. Read as
1. HDFC Top 200 : SIP return – 40.23% ; Lumpsum return – 9.92%.
2. IDFC premier equity plan: SIP return – 48.30% ; Lumps sum return – 9.04%.
3. Reliance Regular savings equity: SIP return – 38.64%; lump sum return – 3.51%.
I think its not wise to invest lumpsum in mutual funds at this point. yes it is bull run but we cant say whether it is starting point or ending point of the bull run. we dont know how much steam left before the crash. May be we can tell in hindsight. Even if you invest now and suppose there is further bull run of some 5,000-10,000 points (who knows :)) then comes difficult part i.e. timing the point of redemption before the crash.
Following is the piece of information i found in valueresearchonline.com couple of days back.
Return on investment made in Jan 8, 2008
Scheme SIP Return (%) Lump sum (%)
HDFC Top 200 40.23 9.92
IDFC Premier Equity Plan A 48.30 9.04
Reliance Regular Savings Equity 38.64 3.51
Monthly SIP of Rs 1000 starting from 08/01/2008
SIP Return as on 20/09/2010.
Just to give you one example. I got this data from ICICI Pru AMC couple of days back. If a investor had invested a lump-sum money before the crash of the market, today is on marginally profit or loss. But SIP investor, who had started his investments on the same date, is in good profit.
Do not try to time the market. No one can do (except the great man – Gann, who is no more).
Go for SIP now & invest some lump-sum amount when you see red blood on dalal street.
Hope it will help you.
No Mutual funds are safe, everything is subject to market risk. Your buying price is averaged periodically in SIP, so one is not trying to time the market here and investment discipline is maintained.
If you are planning to reap the benefit in next 10 years, then no need to worry about the current bull. Who knows, sensex might be 45K in next 10 years.