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Invest As you Earn

Systematic Investment Plan. Invest As you Earn. Real Return. Real Return = Returns – Inflation - Tax. Real returns are important as they tell you the actual increase in value. Equity - The Wealth Creator . Historically, Equity has been the Biggest Wealth Creator.

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Invest As you Earn

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  1. Systematic Investment Plan Invest As you Earn

  2. Real Return Real Return = Returns – Inflation - Tax Real returns are important as they tell you the actual increase in value

  3. Equity - The Wealth Creator Historically, Equity has been the Biggest Wealth Creator CAGR Returns of Different Investment Avenues from Jan 1980 to Jun 2009 % CAGR Return, Pre-tax Source: CLSA

  4. Equity: Fraught with apprehension, guided by emotions Habit of “Timing” the market could be dangerous…. Greed: Buy Greed: Buy Greed: Buy Fear: Sell Fear: Sell Greed: Buy Greed: Buy Fear: Sell Fear: Sell Due to Greed of making more money we tend to buy at high market levels and because of Fear of losing it we sell at lowest levels. In fact the opposite needs to be done.

  5. Equity Investing = Business Ownership Investing in equity is like investing in business; it takes time to reward. But usually the reward is much higher over a longer period

  6. Its ‘Time’ and not ‘Timing’ that matters Longer the stay better it is. Safety of equities increases with time 28 One-Year Periods 24 Five-Year Periods 14 Fifteen -Year Periods Risk of Stock Market Loss over Time, Mar 1979- Mar 2007 The BSE Sensex is examined with 1, 5 and 15-year holding periods. Periods with Gain Periods with Loss

  7. Its ‘Time’ and not ‘Timing’ that matters Lets assume that you were really unfortunate and invested at the highest point of the Sensex every year since 1980. Had you to hold on to your every Investment till Sept 2007, the is the average CAGR return you would have made would be: 19.5 % p.a

  8. Time-honoured Investment Strategies • Start investing early • Invest regularly • Invest systematically, without heeding short-term market dynamics The secret of wealth creation lies in being disciplined, not in being lucky

  9. Start Investing Early Power of Compounding Difference = Rs. 71 lakhs! (Investment amount difference Rs. 3 lakhs) Compounding allows your money to grow exponentially over time. Start investing early. * Assumes compounded annual returns of 15%over the entire period

  10. Start Investing Early • Mr. X • Age : 25 years • Start : Today • Invest : 5 years • Amount : Rs 10,000 p.a. • Redemption on retirement (age 60) • Mr. Y • Age : 25 years • Start : at age 40 • Invest : 20 years • Amount : Rs 10,000 p.a. • Redemption on retirement (age 60) Returns are assumed @ 10% p.a.

  11. Invest Regularly • It is the small drops that make an ocean!! • Relieves you of the last minute pressure • Slow and steady wins the race • E.g. Split your Sec 80C investments into smaller amounts and invest every month • Reduces the risk of investing at the wrong time • Difficult to predict the market and know when is the right time We earn regularly; We spend regularly Shouldn’t we also invest regularly?

  12. Invest Systematically This example uses assumed figures and is for illustrative purposes only.

  13. Benefits of SIP • Rupee Cost Averaging • WNAV rises, SIP lowers average cost of purchase • When NAV falls, SIP procures more units • Compounding Benefit • Early bird advantage • Convenience • Disciplined saving habit • Auto debit facility • Switch / systematic transfer • Lower entry load SIPs work best over a period of time & There is no wrong time to start a SIP

  14. SIP @ Kotak • Minimum amount: Rs.1000 every month / quarter • Rs.500 in case of Kotak ELSS • Minimum number of installments: 6 • Can be thru ECS Debit (in select locations) or thru Post Dated Cheques. • Initial investment on any day; SIP / STP dates: 1st, 7th, 14th, 21st • For SIP / STP amount below Rs.25 lacs per installment in Kotak Equity FOF / equity and balanced schemes* • Entry load: 2.25% • Exit load: 1% for redemption before 6 months • For further details on terms, please contact your financial advisor * Not applicable for investments by FIIs / sub a/c of FIIs / FOFs

  15. Risk Factors Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the Scheme will be achieved.*As with any securities investment, the NAV of the Units issued under the Scheme can go up or down depending on the factors and forces affecting the capital markets.*Past performance of the Sponsor does not indicate the future performance of the Scheme.*Kotak 30 is only the name of the Scheme and does not in any manner indicate either the quality of the Scheme, future prospects or returns.*The NAV of the Scheme may be affected, inter alia, by changes in the market interest rates, trading volumes, settlement periods and transfer procedures.*Appreciation of the value of the Units issued under the Scheme can be restricted in the event of a high asset allocation to cash, when stock appreciates *Tax laws may change, affecting the return on investment in Units. Statutory: Kotak Mahindra Mutual Fund has been established as a trust under the Indian Trusts Act, 1882, by Kotak Mahindra Bank Limited (liability Rs. NIL) with Kotak Mahindra Trustee Company Limited as the Trustee and with Kotak Mahindra Asset Management Company Limited as the Investment Manager. Before investing, please read the Offer Document.

  16. Invest Regularly & • Systematically Invest through SIP & Make volatility work for you

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