Dear CFP's and Advisers,
I have a problem now please advice me on this.
What is the correct way of creating wealth,
If your answer is SIP for Long Term.
Then what according to you is long term.
Case- I:
I have done a 30 months (2 1/2 Years) SIP as of current date in a conservative balanced fund, now when I tried taking report for my client I am shocked to see a return of mearly 1.72 % till date.
My client says, "Even a liquid fund could have given a better return."
What should I do now?
Case- II:
I have done 69 months (Almost 6 years) SIP till date for another client his return is hardly 7 % till date annulasied what should I do now.
I ask you friends only if the fund value increases our trial will Increase, if we give these kind of fund we will get only less trial.
Please Guide . . . . . . . . . share your views under comments below or write to ifagalaxy@gmail.com (we were told people with hotmail id is not able to post)
Regards,
Alagappan
9841055577
I have a problem now please advice me on this.
What is the correct way of creating wealth,
If your answer is SIP for Long Term.
Then what according to you is long term.
Case- I:
I have done a 30 months (2 1/2 Years) SIP as of current date in a conservative balanced fund, now when I tried taking report for my client I am shocked to see a return of mearly 1.72 % till date.
My client says, "Even a liquid fund could have given a better return."
What should I do now?
Case- II:
I have done 69 months (Almost 6 years) SIP till date for another client his return is hardly 7 % till date annulasied what should I do now.
I ask you friends only if the fund value increases our trial will Increase, if we give these kind of fund we will get only less trial.
Please Guide . . . . . . . . . share your views under comments below or write to ifagalaxy@gmail.com (we were told people with hotmail id is not able to post)
Regards,
Alagappan
9841055577
9 comments:
The word LONG TERM has a different meaning to the different individual but to me anything more than 10 years is LONG TERM as far as Mutual Fund Investments are concerned.
Normally people call it 7 years as a cycle. If you get into the end of the cycle probably in the 7 years you will not find good return. So 10 years will balance out.
Don't do SIP in balanced fund or thematic fund to your clients. It is always go with the diversified equity either large cap or multicap even you can consider Mid and large also.
Hope I have answered your first part of your question if not please tell me I will write back.
Case 1
As I told you earlier don't put SIP in a balanced fund. Secondly you can't compare 2 or 3 years return with liquid fund. In the last 5 years all the diversified fund has give 15% compounding upwards.
We are badly need of educating the client to tell what is long term and how long one should wait for the good return.
Whenever somebody buy real estate their first answer will be I will sell whenever it got appreciated much I will sell and they are waiting indefinite. Here, we are not asking them to wait for indefinite we asked them to wait for 10 years. If the market is good the client can make good profit in less than 5 years also.
We should clearly tell before we take application.
Case II
In the last 6 years, if you have suggested the following funds
Franklin India Bluechip in the last 69 months has given 105886 vs 69000
HDFC Equity has given 119958 Vs 69000
HDFC Top 200 has given 114848 vs 69000
DSP TOp 100 has given 107351 vs 69000
Fidelity Equity has given 108408 vs 69000
ICICI Pru Dynamic has given 110330 vs 69000
ICICI Pru Discovery has given 121288 vs 69000
BSL Dividend yield Plus has given 118409 vs 69000
BSL Frontline Equity has given 108216 vs 69000
Reliance Growth has given 104025 vs 69000
Reliane Equity Opportunities has given 115752 vs 69000
IDFC Premier Equity has given 129324 vs 69000
These the funds which are widely accepted by all the advisers as well as all the clients.
I might have missed something, because i don't find time to go through all. These are the funds which are popular.
In a long run, client will make good money and as a distributor or adviser will also make good money in this provided if you are long termer - 10 YEARS PLUS
I thought I would like to share whatever the little knowledge I know.
Sincerely Yours
B. Padmanaban
Certified Financial Planner,
www.fortuneplanners.com
9884349173
Hello Mr.Alagappan,
Long term is one of the most simplest terms,we look into various terminalogy and confuse ourselves, all we need is associate LONG TERM in our life,for an example a Normal (not the plasma, or LED or LCD)TV worth 18000., we buy and try to hold it for 3 years,but when we see another TV for like plasma,LED which is costlier,we tend to get tempted for the new one,in the process the value of the old one is ,lost and buy the new one. A TV is a TV and we see only on the screen,what is the change it is only the way we look into this.
Generally how do we term our marraige.. short term or long term,do we keep checking what is wrong events in mid term of our married life. we cherish our long married life only at the time of retirement......
It is up to us to decide among ourselves.
Cheers.......
Thanks & Regards
Karthik
Chennai
you have to sell goal based or need based either SIP or LUMSUM some times lumsum works well than SIP,
some times SIP do well than Lumsum
depending once goals they could invest supose person needs moneys after 10 or 15 years he always do invest in SIPS long term SIP od well to accumalte more UNITS
SHIVA PRASAD KONDURU
I can only say, that if 15year rolling return of sensex is positive and the India Growth story, if continue for that long , then 15 year is the long term.
Sarada padhi
Bhubaneswar.
Again for the case of nagative SIP return, it should be according to the length of the tenure and the objective of the client. Sale dream not SIP.
Dear Alagappan,
Any equity investment is linked to the cycle of the equity market. It is very difficult to predict which is the correct entry point for equity investments. That is the reason why we recommend SIP route to our customers. Here again which part of the cycle you enter is very important i.e., whether you are at the peak of the cycle or bottom or middle. So if you are supposed to be at the peak then your return on SIP will also take time to give a decent return. If you had made your client to enter at the bottom of the cycle then the recovery would have been faster. Here again to determine which is the peak and which is the bottom is very difficult to decide. But I think the thumb rule to decide whether the market is high or low is to go by the market PE. There can be other factors too like the fundamentals etc., but this is only a means not a solution. Srinivasan Money Kare
There is nothing like long term or short term. It’s just a perspective. In last 10 days many investors have made huge profits or say more than 7% net return. You can surely help client to define his goals and act accordingly but that may or may not work always. That’s why you need to monitor and realign. Clients always win when you start arguing with them. Ultimately it’s their money.
Don’t believe only in automations. SIP is an automatic triggered, disciplined investment. It’s just a way of accumulating units at various prices at specific intervals. That doesn’t guarantee any return. You should digest this.
I suggest that book profits periodically to avoid heated arguments with clients and rebalance the asset class.
Case I: Already answered above.
Case II: Well thank God that you are in India and not in Japan. If you believe in India’s growth story than you may see 17% instead of 7% in the coming period. So, cross your fingers and BELIEVE.
Anything more than 1yr is technically called as long term; but as far as equity SIP is concerned it is better to make the customers digest the principle of longer the better concept. SIP in a diversified / mid-cap / multi-cap is more advisable than an SIP in a balanced fund / hybrid funds.The chances of such funds giving less than liquid fund returns in a five year rolling period is almost NIL. With absolute conviction I can tell you that, SIPs are one of the greatest way of wealth creation... Always have a long term goal or objective in your mind and stick to that without falling prey in market movements ...in good times and in bad times.
Ramesh A, Access Finserve, Kochi
9847080473
accessfinserve@gmail.com
India being a growing nation (as compared to developed nations).So it may be assumed that next 10/15 yrs (during which India becomes a developed nation) is the time we can get maximum sustained growth which would reflect in the stock mkt.It may happen that within that time frame in periods the mkt may move into bubbles(overexerted PEs)as in 2007, may hurt the investor long term goal (10/15 yrs). In such situations we advisers may have to be procactive in rebalancing the asset allocation.2002 to 2007(bull phase) and 2008-09 bear phase. THe people who stay invested in these extreme periods(specially the bear have made excellent gains).However if you see 3 to 4 yrs returns the figures show a dismal period and create a problem for advisors when we define long term as 3 yrs.IO guess we should go with min 5 yrs (provided extraordinary falls like 2008 global meltdown do not happen
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