I’ve 5 lakhs with me, how should I invest?
Worried about elections, Trade (Trump) wars or Market is volatile?
The solution is rather simple, SIPs close cousin – STP – Systematic Transfer Plan, a method to stagger investments into equity funds over a period of time.
Ram has received 1.2 lakhs as annual bonus and he wants to invest in equity but does not want to time the market. What can he do?
He can invest in a fixed income instrument (e.g. Liquid fund) and transfer 10k every month to an equity mutual fund scheme.
By doing this, he gets triple benefit
- Generating higher returns in liquid fund than that of a savings account.
- Smooth transition in Asset Allocation.
- Getting the benefit of SIP (rupee cost averaging).
