Investments made simple

When in doubt- Do STP to average out your lumpsum investments. SIP is what we all know is  Systematic Investment Plan which is probably the best way to invest in mutual funds by way of regular, fixed investment every month. However, at times we do have lumpsum money but it does not fit in the monthly scheme of things. We should take the STP ( Systematic Transfer Plan) route in such scenario where the Lumpsum money is staggered over a period of time so that it can somewhat work like an SIP if not exactly SIP. STP can be done daily, monthly, weekly or fortnightly as per the market and as per the future expectation of the market so as to average out our investments to the best possible manner. The modus operandi of STP happens by putting the lumpsum money in the liquid fund of a particular fund house and then slowly allocating it towards the destination fund which might be an equity mutual funds as per the risk appetite of the client and the time horizon. This way we can av...

VOLATILITY- A BLESSING IN DISGUISE While there is all the noise, hue and cry regarding the free fall in the markets which I think is OK. But, I also feel that in every problem lies an opportunity. And here the opportunity is to increase our wealth by averaging our already existing investments. Now, the crux of all the investments lies in averaging it out when the chips are down, which would help us lower our average cost of investments. Consequently, our average purchase price would become low. It applies to all investments be it equity, gold, real estate or any other asset class which has an element of volatility involved in it and has a cyclical nature. So, when the markets are down, we should not try to time it as it is a futile chase timing the market. Rather, we should buy at every lows in the market not at one go but in tranches. For ex. we can add to our already existing Mutual Fund schemes with every fall in the market. So if we have 1 lac surplus and we are already...