SIP or Lumpsum: Which Investment Strategy is Right for You?

dear viewers welcome to this episode of expert speaks mutual fund Investments needs no introduction invest in mutual funds s everything has become a household name thanks to the Raging Bull Market what we have been seeing in the last 3 four years the rise of ftech companies articles newspapers television shows everywhere mutual fund is a Hot Topic but there are finer points to consider when you invest in your mutual funds in this episode I'm going to talk to the guest of the day Mrs sria Basham about the mistakes people make the wrong assumptions people make when

it comes to question of mutual funds stay till the end of the video we are going to discuss some of the very fine points many would have missed this is n Mone clinic for you and I'm Dr chra your financial guide for a happy [Music] living NRI money Clinic no hype just the right ADV [Music] to talk about the investments in mutual funds and all the points that you need to know the mistakes people make while they invest in the mutual fund I have invited for today's presentation eminent guest speaker Mrs S Bashan Miss saram

has more than three decades of experience in the financial line her initial part of the career in the finance started with writing to prominent newspapers like Hindu online at times of India she has worked for several other newspapers she has also contributed articles to digital media like ET online and others in his carer spending 19 years she has published thousands of articles on various aspects of Finance like banking personal finance and UNC corporate India in the Year 2007 she started a firm called V adwa which means money unlimited with an intention of serving the Common

Man the Fine Art of investing and reaching the life goal gos under her stewardship in the last 17 years hundreds and hundreds of families in bangaluru have realized their Dreams by reaching their life goals uh Mrs Shala bashin has a huge fan following across Globe welcome to this episode Shala mam thank you Dr B for having me on your television show thank you so much uh shika mutual fund needs no introduction today mutual fund investment has become synonymous with the word sip uh sip is Mutual Fund mutual fund is sip is is it true or

is there more to it what do you have to say very true I think thanks to the promotion of mutual F lot of investors think uh mutual fund investing itself is sip in fact we have lot of uh firsttime investors who come to us say that I want to invest in sip not mutual fund so that is the popularity of sips today and as we all know sip is just a tool for investing in mutual fund while uh sip has become a synonymous with invest in mutual fund but sip is the is is it the

only way of investing in mutual funds or there are other means of investing in mutual funds uh What proportion of somebody's saving surpluses that they have can be invested through the Sip R uh I would say sip or sip is one of the options for investing in mutual funds it need not be the only one in fact I mean as all of us know the beauty about sips you can get started with the equity investment with a smaller amount as you get older as you get wealthier I feel sip should not be the only product

for investors they should have a combination of Sip and lumpsum investments in fact we have done a lot of comparisons and you'll be very surprised in the longer term there is not much difference between the IR you earn between a lumsum and sip it's just that sip lets you get started small and I would say it is sip is a good sh for people who want to invest in the equity Market is s the only route or is mutual fund the only route or are there any other means that you feel the investors can expose

themselves uh what do you have to say based on what you have practiced in your career in our company what we do is as I said sip or mutual fund is the best way to get started for someone who has no exposure to equity as they get older as the money gets bigger we also make them get exposure to other products for instance you have PMS portfolio management schemes you have aifs alternate investment funds but then it also depends on the how much stomach the investor has for his abilities and depending on that we advise

but there are also a school of thought in fact we have a lot of clients who are very comfortable with only investing in mutual funds have built their wealth phenomenally so there's no right or wrong answer I would say it need not be the only product you can have mutual funds and other options also when it comes to question of investing in mutual fund there are various categories of mutual funds you have aggressive funds you have hybrid funds you have debt funds you have conservative funds all category of funds are available since an investor is

investing in mutual fund through the Sip route do you agree with the point that they should choose only the aggressive funds reason being I'm not exposing my entire amount of money in one go rather I will staggering my investment month after month I will average out the price is the aggressive fund is the only place where they should invest or you have any other the suggestions for my audience we believe any investor who comes to investing in equity he needs to come with a minimum time frame of 3 to 5 years so the longer the

period you can offer aggressive funds simply because the markets as we all know goes through the cycle your ability to average out and you know ride on the uptrend is is much higher when you have the 10 year 15 year 20 year Horizon so to give my answer short I would say the longer the tenure you can afford to be more volatile I would say rather than riskier and shter the tenure go for you know medium risk or lowrisk options and that's what we practice at our organization one of the key drivers of investment outcome

is the asset allocation every asset doesn't perform all the time so there are some assets perform this year some assets some other time this is something which is seen over the different cycle so every advisor speaks about asset allocation now if some investor has to invest through the SI should he jettison this asset allocation practice which is very common or even when you are investing through the Sip route even there also the asset allocation has to be practiced what is your recommendation for the audience uh when they invest through SS uh yeah very interesting question

I would say there's no straight jacket one solu ution for Investments when it comes to investment each individual is different having said that I would say sip is what sip kind of averages out your uh volatility so if it is shorter period go for hybrid or low risky options and if it is longer time you can afford to be more aggressive or completely Equitable having said that when an investor builds a portfolio something like 10 CR 20 CR even a 10% correction in a year we are talking about 2 CR volatility or reduction in the

portfolio value not all investors will be able to stomach that volatility and that is when you need to go for asset allocation I mean it did not be 10 CR or 20 CR it all depends on your fund requirements and your risk taking ability and yes having an asset allocated portfolio really helps because as you said each asset class performs at different points of time you have debt you have uh Equity you have gold you have silver today we have multiple options within mutual fund itself so it's not a bad idea to have a a

multi-product portfolio see like you we are also the practitioners of Finance one thing that we have observed is irrespective of the money the investor comes in his vintage in the system or his experience of investing matters uh somebody who comes and starts his investment Journey For the First Time probably it makes sense for them to strictly follow the asset allocation strictly go with the advice Stander to them but over a period of 3 5 7 10 years when they become exposed to different Market Cycles when they understand that volatility is not lost and they can

ride on the volatility there are good days that will come when customers become more experienced with this kind of a phenomena which happens in the market that is the time probably they can take more aggressive calls in the endm especially when you start in the beginning it's probably better for them to get into the strict asset allocation mode have you experienced similar thing with your clients also I think that but as you know we are all part of the system I think this is where our value at comes as advisers I think we handhold our

clients so that you know we all have seen people who have been in 20 30 years in the market there is always a new high for the market but not a new low so I think when an investor goes through his experience is bad we need to handhold him and tell him that look this is part of the equity culture so don't panic and that is where you know when we all get into the planning mode I'm sure we all you know take our own call calls and advise the clients and allocate the schemes accordingly

and when they Panic you know because as you know the good old joke in our industry is investor returns are always different from market returns I think we as experienced professionals this is where we bring value to the I mean to our clients and made them go through this journey of pains and volatility then all this uh you know the concerns can be addressed but to answer your question today the multi- asset funds or multi- allocation funds have become far more diverse and have the ability to generate risk adjusted returns almost on par with 100%

Equity Fund yes it's not a bad idea to have exposure to them too one more observation that I have today is these are the days of fintech companies there are countless ftech companies which give direct access for investing into the mutual funds the youngsters of today want to do it want to invest in a direct way through the direct schemes they don't want advisers in between what has been your experience of working with these people has at any point of time do it yourself investors have come to you and said that no it's not for

me probably you handhold me and take you through what kind of observations you have made during your practice I'm sure this is a favorite question for many of the listeners and practitioners I would say a simple answer for this when we all fall ill you know when our diseases are very simpler we pop ourselves the medicines when it gets bigger we all rush to the professional doctor same is the case with our industry when the money is small you know let's say your portfolio is five lakhs three lakhs 10 lakh you know that you can

do it yourself when the money gets bigger you want that validation of thought process that is where we come to the picture and to answer your question yes we do have a lot of clients who in fact went out thinking they will manage themselves and after a couple of years have come back saying it is not worth it because at the end of the day every professional has his own core activity and the change and our industry is one of the most dynamic industry and I think KC itself keeps all of us very busy so

you need a professional advisor so there hasn't been much Challenge on that count but yeah there will always be people who think they can do it themselves good Lu to them yes I understand this and of course not everybody can be a do it to yourself investors at the same time we cannot say that somebody cannot do it on his own but that proportion is very small see now look at different professions for example everything that a child can learn is available on Google but we still send our children to the schools every information about

every disease every surgical procedure everything that you want to know about a particular medical complication is available on the Google still you go to a doctor because you want an endorsment when it comes to question of Finance also it's an evolving field more than anything Finance field for an individual investor suffers because of human nature so people want a reassurance people have the usual problems of procrastination IND disipline all these things which makes them are depend on advisers plus when somebody crosses a particular age band let's say 35 40 years you get busy with your

life your career is in an upward Trend you don't have time you have the tiredness you you need a family time that makes you Outsource all these activities this has been my observation somebody who comes Beyond 3540 is actively looking for an advisor he's looking for a value app is that the similar Trend that you observed in your practicing career as well absolutely I would add one more thing I think as advisers apart from doing all the advice as you said today everything is available everybody knows which is a top performing fund which are what

particular fund where does it invest everything I think apart from all this we as advisers should also make the whole process of investing very pleasurable and easy for our clients I think that is when you know unless you bring that value at if you don't upskill yourself as an adviser a client has to be convinced that you know this adviser knows more than me plus he's very knowledgeable and she's making he or she is giving the whole comfort of investing as long as you do that I think today there is enough and more market for

people to approach People Like Us advisers and take he shria you have been in this line for many years many decades now you still have that youthful vigor energy to serve your clients I know for sure that you're not doing this with a compion of earning money today what gives you that satisfaction and what gives you that energy to keep diing even at this point of time yeah wonderful in fact as you said you know after a point money is not everything I think money is important up to certain level both for us and for

our clients and what makes his do it day in and day out I think all our clients I'm sure you are also you would agree with it we are part of the dreams of our clients that sense of satisfaction when they achieve the dream and somebody makes you part of you know that achievement process I think that is the biggest satisfaction we as Financial Distributors get it here I would like to give an anecdote a client of mine bought a Mercedes-Benz car and she sent me the picture of the entire unveiling of the Mercedes-Benz and

sent me a note saying because of you we bought this I think this is what we all live for and I think that keeps us going day in and day out I think this is the biggest achievement I would say not financially but emotional Comfort what clients have and we all a big family today nobody is a client it's a big family that you are managing uh sria thank you very much and I wish you all the health and that inspiration to keep going for many decades to come and dear viewers if any of you

are there in Bangalore you are looking for professional advice you can make best use of services provided by V they are located in Bangalore for your benefit we have shown the email ID of MRSA Basham on the screen you can reach out to her if you have an intention to build your portfolios if you are staying in Bangalore or any part of the globe these days everything happens over a video conference you can do a things over online uh so it's it's all to you you can always reach out to them uh shika thank you

very much for your time great insights and great sharing of experience for the benefit of our viewers we remain in gratitude to you for your kindness to spare your time for the benefit of my audience thank you very much thank you my pleasure and wishing all your viewers also a very happy year ahead thank you dear viewers hope the video that I have done today help you to understand what it means to invest in mutual fund and some of the myths that are there in the m mutual funds have been answered in today's episode if

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