We invest in mutual funds so that we can get our share in economic development. FD does not give the benefit that mutual funds give.
Systematic investment plan for beginners and Fixed Deposits, Around the same time last year when I was writing this column, the growth rate of the Systematic Investment Plan (SIP) investment in India was in my mind. At that time, I wrote that if this trend continues, not only will the equity asset increase to Rs 320 lakh crore in the next 15 years, but it will be about 75 percent of the total mutual fund investment in India.
Now I think my assessment of this was wrong. The events of the last few months show that the trend of SIP is growing faster than this. The reason for this is that SIP is changing the psychology of Indian investors. I was already expecting this. This is the most important impact of SIP on investors. Earlier, the equity market was revolving around the same level and then there was a boom.
In such a situation, a clear distinction can be seen between the behavior of a systematic investment plan for beginners investors and non-SIP investors. This is not only being said on the basis of the estimation of some people, but it is evident in the data of the mutual fund industry. The Association of Mutual Funds in India (AMFI) releases data related to mutual funds every month.
Systematic investment plan for beginners and Fixed Deposits phases
In September 2009, the total flow of investment in equity and equity funds declined by 28 percent. That is, it fell from Rs 9,152 crore to Rs 6,609 crore. This was seen as bad news. But SIP investment increased from Rs 8,231 crore to Rs 8,263 crore. Now the question is what does it mean. This means that non-SIP investors behaved in the same way they used to in the past. Seeing the right opportunity in the market, he pulled out the money and tried to make a profit. However, SIP investors were the exception and they continued to invest in good or bad times.
This is the new world of mutual fund investment, which we are entering. I always believed that over time the attitude of Indian investors would change and they would go in this direction. I had never felt such excitement before because this time it seems to actually happen. And the most important thing is that this change in the attitude of the investors is happening automatically and they themselves are strengthening this change. As more and more investors are experiencing SIP they are getting better returns and relaxed.
However, if you look at all these changes together, you will find that it has given a new option to Indian savers. Truly, if you compare with 17 years ago, today’s mutual funds are now completely new products. The important thing is that all these changes have been done for the better, and this has made mutual funds a great way for Indian savers to make money.
We invest in mutual funds so that we can get our share in economic development. FD does not give the benefit that mutual funds give. The things that are being said and fabricated about the slow growth rate of the Indian economy should not be ignored. Bill Gates once said that we always overestimate what we can do in a year and underestimate what we can do in 10 years. This is more true for savings and investment. Don’t let the months and the year dominate you, it’s the decade that matters to you.