Archive for August 20th, 2009

SIP – A TIME HONORED INVESTMENT STRATEGY

systematic investment plan

Wealth creation is an art and over the years it has changed its avenues and area of interest for investors.

🙂

In this blog, we will discuss what is SIP and what are the benefits of SIP?

🙂

SIP or systematic investment plan is a simple and time honored investment strategy for creation of wealth in a disciplined manner over long term period.

It aims at a better future for investors by giving a good rate of return as compared to one time investor in volatile market by lowering the average purchase cost.

🙂

It is evident from the recent slowdown that the Mutual fund invested trough SIP route has prevented the pitfalls of equity investment and is enjoying the high returns, if compared.

🙂

So it makes all the more sense today when the stock markets are volatile.

🙂

Below are some of the benefits of SIP.


Power of compounding:

If money is invested at an early age one can make money work with greater power of compounding with significant impact on wealth accumulation.

🙂

Rupee cost averaging:

It is not so easy to predict the movements of the market.

An automatic market timing mechanism that eliminates the need to time one’s investments is Rupee cost averaging.

Though SIP does not guarantee profit, but one can invest through it as it goes a long way in minimizing the effects of investing in volatile markets.

🙂

Convenience:

It is very easy and convenient to operate through SIP route as it could be done by simply providing post dated cheques with the completed enrolment form or give ECS instructions.

The cheques can be deposited on the specified dates and the units credited into the investor’s account.

The SIP facility is available in most of the categories in domestic Mutual Fund industry.

🙂

SIP features:

If one would like to earn a good return from its principal then he should have a disciplinary approach.

The disciplinary approach is a vital to earning good returns over a longer time frame.

Once invested through sip route, investors are saved from bothering to identifying the ideal entry and exit points from volatile markets.

🙂

Conclusion:

Though SIP resolves a dilemma often facing investors due to ups and downs in the market price but investor finds it difficult to decide when to invest in the equity scheme.

The success of investors SIP hinges on the performance of his/ her selected scheme.

If the investor is able to make wise decisions and make the best of the Indian volatile market, SIP is definitely a powerful tool to create wealth over time.

🙂

Wealth creation is an art and over the years it has changed its avenues and area of interest for investors.

In this article, we will discuss what is SIP and what are the benefits of SIP? SIP or systematic investment plan is a simple and time honored investment strategy for creation of wealth in a disciplined manner over long term period.

It aims at a better future for investors by giving a good rate of return as compared to one time investor in volatile market by lowering the average purchase cost. It is evident from the recent slowdown that the Mutual fund invested trough SIP route has prevented the pitfalls of equity investment and is enjoying the high returns, if compared. So it makes all the more sense today when the stock markets are volatile.

Below are some of the benefits of SIP.

Power of compounding: If money is invested at an early age one can make money work with greater power of compounding with significant impact on wealth accumulation.

Rupee cost averaging: It is not so easy to predict the movements of the market.

An automatic market timing mechanism that eliminates the need to time one’s investments is Rupee cost averaging. Though SIP does not guarantee profit, but one can invest through it as it goes a long way in minimizing the effects of investing in volatile markets.

Convenience: It is very easy and convenient to operate through SIP route as it could be done by simply providing post dated cheques with the completed enrolment form or give ECS instructions.

The cheques can be deposited on the specified dates and the units credited into the investor’s account. The SIP facility is available in most of the categories in domestic Mutual Fund industry.

SIP features: If one would like to earn a good return from its principal then he should have a disciplinary approach. The disciplinary approach is a vital to earning good returns over a longer time frame. Once invested

through sip route, investors are saved from bothering to identifying the ideal entry and exit points from volatile markets.

Conclusion: Though SIP resolves a dilemma often facing investors due to ups and downs in the market price but investor finds it difficult to decide when to invest in the equity scheme. The success of investors SIP hinges on the performance of his/ her selected scheme. If the investor is able to make wise decisions and make the best of the Indian volatile market, SIP is definitely a powerful tool to create wealth over time.

The PEs Exodus???

The PE Exodus

Several PE Funds seen selling investments in Open Market.

As per Jagannadham T, equity head, SMC Capitals, the recent bounce in the markets have come as a fresh breather of life for many PE investments and they are using it to exit from some of the investments.

To know more on this issue watch the Video 🙂

CLICK HERE



DAILY EQUITY UPDATE – 19th Aug 2009.

bonds risk

POST MARKET REPORT :

The BSE Sensex closed lower by 225.62 points or (1.50%) at 14,809.64 and NSE Nifty ended down by 64.80 points or (1.45%) at 4,394.10.

BSE Mid Caps and Small Caps closed with losses of 62.49 and 33.06 points at 5,434.06 and 6,308.69 respectively.

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The BSE Sensex touched intraday high of 15,096.94 and intraday low of 14,684.45.

Among the Sensex pack 27 stocks ended in red territory and 3 stocks ended in green territory.

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The market breadth indicating the overall health of the market remained negative as 1490 stocks closed in green while 1134 stocks closed in red and 89 stocks remained unchanged in BSE.

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The S&P CNX Nifty is down by 64.80 points or –1.45 % to 4394.10.

The NSE turnover was up Rs.15985.07 from last trading session’s Rs. 15795.70 crore.

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NEWS UPDATES

Era Infra Engineering bagged an order worth Rs 46 crore.

Mega soft board approved selling its US-based Blue Ally division to Trianz Inc, USA for around $13-15 million

Apollo Tyres gained after a block deal of five lakh shares was executed on BSE at Rs 40.75 per piece.

Panacea Biotec bagged an order worth $222.37 million for supply of a vaccine.

🙂

OUTLOOK

Index opened on the flat note & retraced all the yesterday’s gains the day progressed.

It has strong resistance around 4480-4500 levels with the crucial support around 4340- 4320 levels & it almost tested both in today’s session.

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Volatility remained very high throughout the session with market breadth ended strongly in red.

Keeping in view the intermarket perspective, global markets are also in the correction mood, which is likely to extend in the sessions to come, & accordingly our markets will follow through.

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Support – 4350-4300

Resistance – 4450-4480

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TABLES :

Daily Equity Update


sector watch

Comment- Metal & Oil &Gas are the major losers in the day’s session

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SENTIMENT INDICATOR

PCR of index options is at 1.00 from last trading session’s 0.93

PCR of Stock options is at 0.42 from last trading session’s 0.26.

PCR of total F&O is at 0.97 from last trading session’s 0.90.

The advances are 357; declines are 652 and unchanged are 30.

The implied volatility has decreased to 33.65 from last trading session’s 34.87

🙂

POST MARKET

The BSE Sensex closed lower by 225.62 points or (1.50%) at 14,809.64 and NSE Nifty ended down by 64.80 points or (1.45%) at 4,394.10. BSE Mid Caps and Small Caps closed with losses of 62.49 and 33.06 points at 5,434.06 and 6,308.69 respectively. The BSE Sensex touched intraday high of 15,096.94 and intraday low of 14,684.45. Among the Sensex pack 27 stocks ended in red territory and 3 stocks ended in green territory. The market breadth indicating the overall health of the market remained negative as 1490 stocks closed in green while 1134 stocks closed in red and 89 stocks remained unchanged in BSE. The S&P CNX Nifty is down by 64.80 points or –1.45 % to 4394.10.The NSE turnover was up Rs.15985.07 from last trading session’s Rs. 15795.70 crore.

NEWS UPDATES

Era Infra Engineering bagged an order worth Rs 46 crore.

Mega soft board approved selling its US-based Blue Ally division to Trianz Inc, USA for around $13-15 million

Apollo Tyres gained after a block deal of five lakh shares was executed on BSE at Rs 40.75 per piece.

Panacea Biotec bagged an order worth $222.37 million for supply of a vaccine.

OUTLOOK

Index opened on the flat note & retraced all the yesterday’s gains the day progressed. As we have mentioned in our last newsletters that it has strong resistance around 4480-4500 levels with the crucial support around 4340- 4320 levels & it almost tested both in today’s session. Volatility remained very high throughout the session with market breadth ended strongly in red. Keeping in view the intermarket perspective, global markets are also in the correction mood, which is likely to extend in the sessions to come, & accordingly our markets will follow through.

SENTIMENT INDICATOR

PCR of index options is at 1.00 from last trading session’s 0.93

PCR of Stock options is at 0.42 from last trading session’s 0.26.

PCR of total F&O is at 0.97 from last trading session’s 0.90.

The advances are 357; declines are 652 and unchanged are 30.

The implied volatility has decreased to 33.65 from last trading session’s 34.87

Institutional Investors have become more sceptical in committing funds!

Equity Head

Private equity firms are becoming cautious about making fresh investments in India with less funds flowing into this segment as institutional investors have become more skeptical in committing funds without thorough research, experts says.

😦

The rush for PE investments into India has slowdown a bit at present.

Managers are studying the companies more carefully before making any new investment commitment as of now.

🙂

PE funds investing in India has turned cautious and limited partner or the part owners of funds are raising questions over the intent of the investment owing to the fact that global PE fund dipped to record lows during the second quarter of 2009.

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“Limited partners or institutional investors are increasingly becoming sceptical about their investment decisions and are questioning the intent of the General Partners,” SMC Capitals Equity Head Jagnnadham Thunuguntla said.

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PE funds are now preferring to liquidate their stake as   capital market sentiment is improved.

The degree of scepticisim in the Indian Market has reduced to what it was few months back.

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However, with the capital market boom, PE funds are now preferring to exit via open market transactions,” Thunuguntla added.

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However, India is among the few markets wherein the PE firms are still looking at investments in times of downturn, though cautiously.

During second quarter 2009, globally 89 private equity funds reached a final close securing $79.7 billion among them. as per the latest survey.

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“The capital market bounce starting April 2009 has seen several PE (Private Equity) funds selling their investments in the open market.

The recent market bounce has given a fresh breather of life for several PE investments with impressive recovery of losses,” Thunuguntla said.

🙂

Private equity firms are becoming cautious about making fresh investments in India with less funds flowing into this segment as institutional investors have become more sceptical in committing funds without thorough research, experts says.