JavaTechies / Personal Finance

"A smooth sea never made a skilled sailor." - Franklin D. Roosevelt   HDFC Equity Fund has launched 24 years ago on 1 st  January 1995. From an initial corpus (AUM) of ~ Rs. 52 crores in Jan’ 95, HDFC Equity Fund has grown from strength to strength and has an AUM of ~ Rs. 23,500 crores as on June 30, 2019. The Fund has stood the test of time over the last 24 years in which the market witnessed series of domestic and global events such as Asian Currency Crisis, Kargil War, Dot Com Bubble, Global Financial Crisis and multiple state and central elections resulting in market volatility. While such events and market volatility would have given cold feet to an ordinary equity investor, an investment through Systematic Investment Plan (SIP) would have helped those investors who would have continued with their SIP regardless of market volatility. Below table gives investment summary of SIP of Rs. 10,000 per month since the inception of the fund: SIP per Month Total Inve...

Equities over medium to long term is a wealth creating asset. However, it is the nature of the equities to move up and down over the short-term. Trying to time the market over the short-term is extremely challenging. One solution is to maintain a long-term horizon and ignore the short-term fluctuations. On the other hand, SIP (Systematic Investment Plan) helps take advantage of ups & downs in market and mitigate risk arising from market volatility, provided the SIP is continued over long periods of time. There are abundant stories highlighting the importance of long term investing and the importance of averaging through SIP investing. But, nothing can tell it better than the numbers do. Consider this, SIP of Rs 3000 per month in HDFC Top 200 Fund since inception (Oct 11, 1996) has created wealth to the tune of Rs ~82 lakhs as on Dec 30, 2016, despite the fact that the journey was bestrew with many global/local events like tech bubble, Asian crisis, Pokhran blast, Lehman crisis...