1. Advisorkhoj
  2. Post Your Queries
  3. Mutual Fund
  4. I have around 1 crore to invest and need a plan to invest in the market through SIP mode

I have around 1 crore to invest and need a plan to invest in the market through SIP mode

I am a 45 year old retired from my job. I have around 1 crore to invest and need a plan to invest in the market through SIP mode. I do have other income source to cover my monthly needs. I am looking for long term growth via stock market. Please let me know your thoughts and any recommendations?

Aug 3, 2016 by Abraham John, Kochi  |   Mutual Fund

Thanks for writing to us. When you say, investment in the market, do you mean direct equity investments or mutual funds?

If you want to invest in stock markets directly then please note that we do not give any suggestions or stock recommendations. Only thing that we can comment on this is, that investing in stocks through direct market route is more risky then investing in stocks through mutual funds.

If you are interested in doing or knowing more about SIP or systematic investing, please read through –

Since you have one crore lumpsum in your hand and you may want to invest in mutual funds through SIPs, the best way is to put the lumpsum amount in liquid funds and systematically transfer the same to equity funds on weekly, fortnightly or monthly basis. This works exactly like SIPs. In SIPs the amount gets debited from your bank account whereas in case of STP the amount gets debited from your liquid fund. The benefit is that you can earn around 7-8% from liquid funds over the STP period.

Let us understand this through a live example – STP from ICICI LIQUID FUND to ICICI PRUDENTIAL VALUE DISCOVERY FUND

As you can see, we have presumed to have invested Rs. 25 Lakhs on 1st January 2011 in ICICI Prudential Liquid Fund and started the STP of Rs. 5,000 per week after one month to ICICI Prudential Value Discovery Fund (diversified equity fund). Out of Rs. 25 Lakhs in Liquid Fund, Rs. 14.37 has been transferred to equity fund but the current value of liquid fund is Rs. 22.10 Lakhs! The liquid fund has given 9% return.

Whereas, the amount of Rs. 14.35 Lakhs transferred to equity fund is now valued at Rs. 27.41 Lakhs! The equity fund has given annualised 23.99% return. Is not it amazing?

Please check the cash flow and taxation from the above URL.

We think this the best way to deploy your one Crore and stay invested for the long term. You may choose 4-5 good funds from diversified equity funds category for this purpose. Check Top performing mutual funds from here.

comments powered by Disqus
You haven't found the answer for your queries? Do post your queries to us.

© 2016 Advisorkhoj - A Gamechanger Business Services (I) Pvt. Ltd. Brand - All Rights Reserved