You really don’t need hoards of money to join a scheme. Through SIP route you can invest as little as Rs 100 in a plan
Madhu T TNN
Let us call it fear of the unknown. Most first timers in the investing arena suffer from it. They want to start investing for their various goals in life. But they seldom get started. Some don’t know how to begin. Some don’t know which is the ideal investment avenue available to achieve the goal. Some are swayed by the market swings. Look at Reshmi, for example. She has been wanting to start investing in a small way ever since her baby girl was born. Three years have passed and Reshmi is yet to find an ideal mutual fund scheme that would make her daughter rich. “I have asked so many friends to suggest a mutual fund scheme that would be ideal for me. Some got back with their suggestions, but I saw that those schemes were not doing well when I was ready to invest. I think I will start investing from next month,’’ says Reshmi. But how will she find a scheme to invest? “I hope someone would come up with a good suggestion,’’ she replies. Hopefully, she wouldn’t waste another three years for an ‘ideal’ scheme. Nikhil’s problem is totally different. This spendthrift middle-level sales executive with an MNC knows he has to start saving for his future. However, when it comes to investing his imagination doesn’t stretch beyond savings bank account. Or a fixed deposit, at the best. “It is not that I don’t know where Dalal Street is. I know about the existence of stock market, mutual fund... But I really have no clue how one get into the whole thing,’’ he says. Did he ever approached a financial advisor or a mutual fund seller? “No, I don’t have huge savings. So, it is pointless to approach a professional,’’ he replies. But who told him that you need hoards of money to start investing? None, but he thinks so. Well, if it really strikes a bell, read on. To begin with, you really don’t need a sack full of thousand rupee notes to start investing. In these days of SIP (systematic investment plans from mutual funds which allows you to invest regularly in a scheme), you can invest as little as Rs 100 in a mutual fund scheme of your choice. The same holds true for seeking professional advice. The advisor is not going to bank on your savings. Rather he knows you are not a smart saver, that is why you are seeking his help. That is exactly what he will do. He will help you draw up a plan, so that you will meet your goals easily. As for finding an “ideal’’ investment vehicle that would always be steady, only your fixed deposit would stand that test. If you are getting into the stock market, you should have a stomach for risk. You should also learn live with volatility and no assured returns. For example, look at Reshmi once again. She has decided invest in equity mutual fund scheme that would invest in the stock market. But everytime she sees her chosen scheme been badly hit by a market swing, she postpones her investment. This method of timing the market would only help her losing the opportunity to earn good returns. Remember, she has wasted three years in the process. Anyone who follows the stock market knows that stocks returned handsomely in the last four years. Had Reshmi opted for SIP with an equity scheme, she would have continued investing despite the market ups and downs and would have made her daughter richer in the process. Financial experts would like people like Reshmi and Nikhil to start small at the earliest. They also want them to stay in the market during ups and downs to see the real action themselves. “I would ask first timers to invest with very little money in stocks if they are scared of the wild movements in the market. They can use a small portion of their bonus, for example, to invest in a equity scheme,’’ says a financial planner. “Forget about the money for two or three years and see for yourself how you have fared. This will give you the confidence to withstand volatility.’’
Madhu T TNN
Let us call it fear of the unknown. Most first timers in the investing arena suffer from it. They want to start investing for their various goals in life. But they seldom get started. Some don’t know how to begin. Some don’t know which is the ideal investment avenue available to achieve the goal. Some are swayed by the market swings. Look at Reshmi, for example. She has been wanting to start investing in a small way ever since her baby girl was born. Three years have passed and Reshmi is yet to find an ideal mutual fund scheme that would make her daughter rich. “I have asked so many friends to suggest a mutual fund scheme that would be ideal for me. Some got back with their suggestions, but I saw that those schemes were not doing well when I was ready to invest. I think I will start investing from next month,’’ says Reshmi. But how will she find a scheme to invest? “I hope someone would come up with a good suggestion,’’ she replies. Hopefully, she wouldn’t waste another three years for an ‘ideal’ scheme. Nikhil’s problem is totally different. This spendthrift middle-level sales executive with an MNC knows he has to start saving for his future. However, when it comes to investing his imagination doesn’t stretch beyond savings bank account. Or a fixed deposit, at the best. “It is not that I don’t know where Dalal Street is. I know about the existence of stock market, mutual fund... But I really have no clue how one get into the whole thing,’’ he says. Did he ever approached a financial advisor or a mutual fund seller? “No, I don’t have huge savings. So, it is pointless to approach a professional,’’ he replies. But who told him that you need hoards of money to start investing? None, but he thinks so. Well, if it really strikes a bell, read on. To begin with, you really don’t need a sack full of thousand rupee notes to start investing. In these days of SIP (systematic investment plans from mutual funds which allows you to invest regularly in a scheme), you can invest as little as Rs 100 in a mutual fund scheme of your choice. The same holds true for seeking professional advice. The advisor is not going to bank on your savings. Rather he knows you are not a smart saver, that is why you are seeking his help. That is exactly what he will do. He will help you draw up a plan, so that you will meet your goals easily. As for finding an “ideal’’ investment vehicle that would always be steady, only your fixed deposit would stand that test. If you are getting into the stock market, you should have a stomach for risk. You should also learn live with volatility and no assured returns. For example, look at Reshmi once again. She has decided invest in equity mutual fund scheme that would invest in the stock market. But everytime she sees her chosen scheme been badly hit by a market swing, she postpones her investment. This method of timing the market would only help her losing the opportunity to earn good returns. Remember, she has wasted three years in the process. Anyone who follows the stock market knows that stocks returned handsomely in the last four years. Had Reshmi opted for SIP with an equity scheme, she would have continued investing despite the market ups and downs and would have made her daughter richer in the process. Financial experts would like people like Reshmi and Nikhil to start small at the earliest. They also want them to stay in the market during ups and downs to see the real action themselves. “I would ask first timers to invest with very little money in stocks if they are scared of the wild movements in the market. They can use a small portion of their bonus, for example, to invest in a equity scheme,’’ says a financial planner. “Forget about the money for two or three years and see for yourself how you have fared. This will give you the confidence to withstand volatility.’’
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