Shiva 4 years ago I was in your place exactly trying to wait for the market & I lost 1 year while waiting. Later I choose 5 funds all growth option bcoz this SIP amount was the spare amount which was kept in the bank & I was ready to take the risk of loosing money, infact I lost a lot of money in short term but my investment was not for short term. Today all losses are recovered when the markets are high. I can book profits now & change my funds or I can still continue as I don't need that money immediately.
Quoting from this thread in MF section of the forum
http://www.traderji.com/mutual-funds-discussion-forum/4004-mf-scheme-dividend-growth-bonus.html
Growth Plan and Dividend Plan
A growth plan is a plan under a scheme wherein the returns from investments are reinvested and very few income distributions, if any, are made. The investor thus only realises capital appreciation on the investment. This plan appeals to investors in the high income bracket. Under the dividend plan, income is distributed from time to time. This plan is ideal to those investors requiring regular income.
Dividend Reinvestment Plan
Dividend plans of schemes carry an additional option for reinvestment of income distribution. This is referred to as the dividend reinvestment plan. Under this plan, dividends declared by a fund are reinvested on behalf of the investor, thus increasing the number of units held by the investors.
In Growth plan- the unit value keep on increasing.
In Dividend reinvestment plan - you get additional units for the dividends
This link also should help
http://www.valueresearchonline.com/learning/storylearning.asp?str=7768
Dividend PAYOUT option will pay you money from your current market value ie from your money which had grown due to increase in NAV. Whereas the Growth option will not do like this. Another option is Dividend Re-Investment will invest the Dividend received thereby increasing the units.
Dividend Payout-->When u go for this option u r supposed to get the dividend declared by fund.Whenever Dividend is declared u will observe fall in ur NAV
Dividend Reinvestment-->In this Case whenever dividend is declared ..Instead of giving dividend to u ..it will be again invested in ur fund.
Growth-->It is most opted choice of investors .In this kind of funds Dividends are not declared but ur investment will grow.
Hope this helps.
Jesse