What Is the Risk of Investing in SIP?

Actual Question:

What is that I am risking if I would be investing in SIP for more than 40 years? Supposedly I have been investing 10K for more than 40 years will I get a considerable return from SIP , How much is the percentage of risk in SIP?

Answer:

‘Systematic Investment Plan (SIP)’ is indeed a safe investment. However, SIP is not product or a mutual fund unit by itself but merely refers to a habitual monthly investment. Through SIP you may invest in a mutual fund or an exchange traded fund (ETF) or directly in stocks.

Therefore, when you want to invest Rs.10000 every month for 40 years, which is indeed commendable, you must know in what kind of product you must invest in. For example, if keep investing for 40 years in income or debt fund, while the principal may be safe you will not be a rich and wealthy person after 40 years. Besides your good resolve, you need to play smart too!

Please invest in a well diversified index mutual fund through the medium of SIP. Here is what you can be worth after 33 years of active investments and keeping the investments alive for another 20 years.

Related Links:

• What is the Minimum SIP Subscription Amount and Best SIP?

• What Is The Difference Between Dividend and Growth Fund. Which Is Better?

• Is SIP Safe To Invest?

• Which One is Better: Recurring Deposit in Bank or SIP in Mutual Funds?

• What is the Minimum SIP Subscription Amount and Best SIP?

What are the Multibagger Stocks in India?

Actual Question:

Can any one suggest today's multibaggers of Indian equity space?

Answer:

Dear Friend!

Multibaggers are identified in hindsight and not in advance. This is the reason mu guru Warren Buffett says, “In investing the rear view mirror is always clearer than the windshield”. Therefore, searching for multibaggers is akin to searching for a needle in a haystack. Please drop this idea.

But do not despair. There is a better and more surer route to multibagger returns from the stock market. All good stocks worth investing (please see Portfolio 2K15) will give you returns many times more than the investment in the long term. So the trick is not about chasing multibaggers but identify good stocks, invest in them, wait patiently for a long time, allowing the law of the Miracle of Compounding to work for you and earn you multibagger returns.

Please read the book ‘The Intelligent Investor” by Benjamin Graham, learn value investing, start investing, stay invested for very long time and become rich!

Thank you,

Best Regards

Anand