How about SIP in stocks for long term?

#1
If i decide to go for SIP in stocks,what would be the optimum amount to invest monthly? Can I invest 5000 monthly?

Secondly if the stock has gone above out purchase price , then should we still do SIP in it?Or only when it goes below our purchase price we should buy?

Kindly advise

Regards,
Nilesh
 

TracerBullet

Well-Known Member
#2
If i decide to go for SIP in stocks,what would be the optimum amount to invest monthly? Can I invest 5000 monthly?

Secondly if the stock has gone above out purchase price , then should we still do SIP in it?Or only when it goes below our purchase price we should buy?

Kindly advise

Regards,
Nilesh
1) Amount depends on you and how much you save.
2) SIP removes emotions out of investing and gives you a decent average cost over time. If you already have good list of stocks, you can use SIP. There is no logic in not investing above purchase price. Ideally you want to hold stocks that move up.

Note - Market is a place where a lot of people loose money through their own actions. Investing requires a whole range of knowledge and skills in identifying, comparing stocks and having conviction to hold and knowing when to sell, and how to manage a portfolio etc. Behavioral Biases will ensure that most people buy high and sell low. People book quick profits and hold loosers forever ( "ill wait until price reaches my cost price" ) etc.
Even Bluechips are not guaranteed to make money, just look at BHEL for last 4-5 years. And small companies can be multibaggers or they can turn to nothing like opto circuits. Equity is volatile, and Bear crashes can be very painful.

Point is you need to study and develop skills to invest and a bit of luck. Unless you are convinced that you have those (proven) skills, i suggest that you participate using Mutual Funds. The next decade might give very good returns and with good Mutual Funds you have a low risk way of investing. By low risk i mean the risk of underperforming the indices in the long run and not low volatility.

By all means, do invest in stocks and learn but put majority of money in Mutual Funds.

You can use value research, fundsindia and morningstar.in to get a list of good funds. But dont blindly look for good ratings / last year returns. Ratings change and in case of value research they define risk as volatility which is not necessarily true. Instead read their analyst commentary, get overview of portfolio numbers( equity/debt, market cap etc. Dont care much for what stocks they buy), check expenses and check how consistently they have done well over the years. Some good funds are here.

Invest using SIP ( or STP from liquid ) and invest in DIRECT funds only.
 

prst

Well-Known Member
#7
In long term... Mutual funds will be no better off than etf... So choose ur horizon.... No wonder why the biggest mutual fund in the world is pure index based investing....
If you look at the transaction charges, fund charges etc, my bias is towards index based ETF (nifty bees, bankbees etc)
 

TracerBullet

Well-Known Member
#9
In long term... Mutual funds will be no better off than etf... So choose ur horizon.... No wonder why the biggest mutual fund in the world is pure index based investing....
If you look at the transaction charges, fund charges etc, my bias is towards index based ETF (nifty bees, bankbees etc)
Have you actually looked at the data? Have you looked at India Mutual Funds and Indian Indices performance? Have you even looked at Nifty Bees performance and its expenses? Or did you just read some US markets based article and make your opinion :)

Can you explain to me here why, for long term investment, would anyone want to use NiftyBees over say a large cap based fund like UTI opportunities . And this story is true for CNX 500, the midcap indices and so on. Many many good MF have consistently beaten them.
Even Balanced funds, say Prudence, that have a decent proportion in debt, have beaten indices like Nifty. And prudence has not done that well recently :)
Reduce your expense by using DIRECT funds.

It seems to be futile to explain as people keep posting the same nonsense of using index funds in India. Anyway, its your money.

Read this.
 

prst

Well-Known Member
#10
Can you please tell which is a "good" mutual fund ? How to define what is good ? Does past performance of the fund guarantee fabulous returns ?
If I know its good, then I would buy loads of tat fund instead of any other share or etf

Secondly, index fund is different from etf. It has mf charges which doesn't apply to etf.
 

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