SIP: Best way to Mutual fund invesments?

It is now fashionable for people in the media to write about SIP. I remember in 1998-9 when some of us went around talking about SIP people would look at us in disbelief. Suraj Kaeley who was then with Templeton would go around meeting investors and talking about SIP. We would call him “SIP Suraj”.

However, now SIP is well known and everybody wants to write about it. Suddenly you need to write a contrarian article on SIP – so how do you do it? Simple take a short period of linear growth or linear fall – you can always find supporting data to say how SIP does not work!

SIP works, over long period of times. Also is it not just theory to say if you had invested Rs. 750,000 in 2002 it would have grown to Rs. 45,00,000? After all I did not have 750,000 in 2002. However I could set aside Rs. 10,000 every month for the past 75 months, hence my contribution is Rs. 750,000 and it has grown to Rs. 37,00,000. As an end user, I am thrilled, damn the analysts.

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3 Responses to “SIP: Best way to Mutual fund invesments?”

  1. Ravinder Makhaik on April 13th, 2008 at 4:55 pm

    Subramanyam, you have a fortune out there in that investment.

    You sure know how to beat inflation.

    However your blog being there is inspiration enough to dream it.

  2. Why do fund houses not encourage SIP investments they way they should? Most of them still like lump-sum – and that is surprising – or should i say shocking, is it not?

  3. Well said sir, recently i read an article in moneylife which said about sip not good for long term, lumpsum investment is good for long term, reading such article clients gets confused, now today how many people can do lumpsum, if i had lumpsum i would have invested in real estate and would make money in short term. I enjoy when the market is down when my sip is going. I met mr sip keyley in pune and also attended ur session. Sip rocks but with a goal.

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