SIP in Stocks

visshu · #1 21st September 2008, 08:24 PM

Hii all , i had a question in my head for a long time and was trying to get answer from here and there but no luck... so i finally decided to put up my question up here:-- like sip in mutual funds if we do sip in stocks directly like putting a fixed amount say 5000 on first monday of every month for a period of 5, 10 or may be 15 years in some stock say ACC or SBI, what would happen, what r the possible outcome, would this be profitable, how to backtest for the above said time span... i think this is possible and should be more profitable than sip in mutual fund's as here there r no entry or exit loads and no fee to be paid to MF manager's etc...can some one through some light am waiting eagerly....

justsayraj · #2 22nd September 2008, 11:38 AM

sounds good. profit taking has to be exercised in between.

actuaryinmaking · #3 23rd September 2008, 11:03 PM

Interesting thought...though this wouldnt be sure fire technique per Technical Analysis...

Worth a thought..may be as Warren Buffet style...as long as ROE stays above 20% and basic FA parameters remains good...

May be add in 1 time, 2 times , 3 times and 4 times ratios for every fall of 5-8% on bad days...hold for long time and keep booking profit on high days..

bandlab2 · #4 24th September 2008, 10:16 PM

Quote:

Originally Posted by visshu

Hii all , i had a question in my head for a long time and was trying to get answer from here and there but no luck... so i finally decided to put up my question up here:-- like sip in mutual funds if we do sip in stocks directly like putting a fixed amount say 5000 on first monday of every month for a period of 5, 10 or may be 15 years in some stock say ACC or SBI, what would happen, what r the possible outcome, would this be profitable, how to backtest for the above said time span... i think this is possible and should be more profitable than sip in mutual fund's as here there r no entry or exit loads and no fee to be paid to MF manager's etc...can some one through some light am waiting eagerly....

prpblem is with fractions. in india you cant by 2.5 stocks, you need to by 2 or 3 stocks. all index stocks are high valued, or 5k you cant get whole numbers.

if you have 20000 rs per month, buy a mix of reliane, sbi, l&t, tata steel. you may need to buy nearest roun figure

if you buy this on first working day of the month or 10-15 years, yi will get good returns. you may beat most of diversified MF. Take profits periodically

visshu · #5 2nd October 2008, 10:41 AM

thank u all for ur precious replies, 5000 was taken as example 20,000 or 25,000 is a reasonable amount, but for many this amount might not be possible as we r talking SIP month after month, i think there r many good stocks available at rates where 5000 can fit. and yes u r right about round of fig. if the amount of shares comes to 2.4 we can buy 2 or if it comes to 2.7 we can buy 3, one of my question still stands is there any way it can be back tested, i know its not easy as companies give dividends,splits etc..and accommodating these is difficult but still a broad idea can be obtained.....