Tuesday, September 23, 2008

Student's 1500 SIP Investment

Ajay Kumar wrote :
hello sir,i am a student new to mutual funds and dont know any thing
about it.i saw ur blog which was helpful to know something.in the blog
u suggested equity funds more,so i want to invest 500 each in three
funds(Hdfc top 200,Reliance growth fund and Fidelity or Birla equity
fund) every month because my pocket money is 2000 only so i can invest
only 1500.my main aim is to make the money double or improve in 3-5
years.will it be possible?i choose these funds bcoz u repeatedly
suggesting these funds in ur blog.presently i have 24,000 in my
savings account(canara bank) and i get monthly 2000 pocket money.plz
give me any options to improve my money.i didn't withdrawed the amount
from past 4 years(25000).i use my savings account only for
deposit.so,plz give me suggestion that how can i use this 24000 to
make some profit.thank you :)


Dear Ajay Kumar,
Thank you for your kind words on my blog.
Your 1500 monthly investment is definitely not a small sum of amount. And it is heartening to note that you are intending to invest 75% of your monthly income(pocket amount) in mutual funds. I appreciate your resolve towards saving and congratulate on choosing the right avenue for savings.
Regarding doubling your money in 3-5 years may not be possible, simply because, the markets are not in the bullish mode (which it was for the past 5 years). However, 18% returns should be considered as achievable.
For your age, with practically no BIG expenses coming up in foreseeable future, you can go slightly aggresive with your fund choices. My choice of investment would be
500 * 1 in Fidelity Equity Fund
500 * 1 in Birla Sunlife Equity Fund
200 * 2 in Reliance Growth Fund
100 * 1 in Reliance Natural Resources Fund

Also, for your 24000 lumpsum amount which you have in your SB Account, you can consider investing in a Large Cap Fund like HDFC Top 200 Fund.
Keep at least 3 months expenses in SB Account as Emergency Fund and balance remaining keep investing in Mutual Funds to make maximum revenue.
Best of luck,
Srikanth Shankar Matrubai.

1 comment:

Unknown said...

Your blog have good article for SIP investment which is so valuable for me and you have done good job on your blog which is good for your blog lover, thank you.....