Query about SIP..mutual funds..?

Question

Hello,
This is Santosh. I have completed graduation and im 22 years old. Im plannin to start SIP, as a newbie i dont have much knowledge about SIP. All i have gathered is a little information through internet. Well, i have few queries


1) When i checked SIP calculators through some websites like hdfc and reliance, there is an option to choose the annual return percentage varying from 4% - 20%..I could not understand how can we choose the percentage when market acts regardless of our choices . If it fluctuates why there is option of percentages ?. if i choose 20% , will be getting the same % till the term end ?

2) There are lot of mutual funds listed. So, which one are we supposed to choose so as to invest via SIP ??

3) Is demat account or any other such kind is necessary to start SIP.

4) please do let me know about other investments too. so that i can have a good portfolio.


Thnx and Regards
Santosh

Answer 1

1. SIP calculators are just examples, and not final figures. They tell you how much your wealth will be, if (and only if) the mutual fund (in which you invested) gives that much return. So, choosing 20% doesn't mean anything.

2. You are right that there are many mutual funds. Take your own time to research on them. You should be comfortable with the theme of the mutual funds and the with the fund manager. For example, some mutual funds invest totally in infrastructure companies. Infrastructure projects take long time to complete. Therefore, we can safely assume that such funds will also take long term to give you returns. Will you be comfortable to invest in such mutual funds? Some mutual funds invest mostly in debts (it means, more than 50% of its investible amount will be invested in debentures or Government bonds). They help you keep your money safe, but their return is generally lower than return given by mutual funds investing money in equities. Do you want higher return or safety of your money? Only you can decide such things. So, take your own time to decide your priorities.

3. Demat is not compulsary, but it is beneficial.

4. You can also invest in equities, Fixed deposites, postal savings, insurance, gold, etc.

Answer 2

Firstly you dont need any demat account to invest in SIP. This is always gives good returns for long term investment. If you want to invest in SIP then hdfc top plans, icici dynamic and growth plans are best as these also relate to banking sector.

Answer 3

for mutual funds d mat account is not necessary they may ask pan card otherwise tax at the applicable rate will be deducted.



yes the market is volatile and they offer varying interest rate



if you opt for 20% you may get that interest till the end but the amount you invested will be invested in highly volatile shares



in otherwords the interest may be sure and safe but the principal may be in risk



other investment options?



share market best returns but risky



mutual funds is next



gold is also highly volatile



land nowadays lot of scams in land purchase/sales



the last two is not applicable for SIP



bank deposits (recurring deposit is like SIP) IS THE LAST resort

Answer 4

SIP is just like Bank Recurring deposit but here there is a chance to get more return with little risk compare to Bank Fixed Deposit. There is no correct predictions on various sites. But SIP will definitely give good return in long term

Answer 5

For investing in mutual fund you don't need demat account what u need is pan card and a bank account.

What calculators tell u is the estimated return which is not actual and return %age is just estimate what u think which actually don't matter.

Answer 6

SIP calculators give you estimate about your wealth. You should keep in mind that it is just a rough estimate not accurate measure of the wealth. All the indicators which calculate the final estimate are adjustable. The final estimate depends upon the ICICI Prudential mutual fund you have invested in. Proper research about mutual funds and market trends will give you option with maximum returns.

Answer 7

20% return is much higher return expected in mutual fund SIP if it is happen you get much better amount what you expect.