Vikalpa Finvest. CONTENTS FINANCIAL PLANNING EQUITY SIP.
-
Upload
louisa-wright -
Category
Documents
-
view
226 -
download
0
Transcript of Vikalpa Finvest. CONTENTS FINANCIAL PLANNING EQUITY SIP.
Vikalpa FinvestVikalpa Finvest
CONTENTS CONTENTS FINANCIAL PLANNING
EQUITY
SIP
Financial Goals
EducationEducation Earning YearsEarning Years
Phase IPhase I Phase IIPhase II Phase IIIPhase III
Age- 22 yrsAge- 22 yrs Age- 60 yrsAge- 60 yrs
MarriageMarriage
Child birthChild birth
Child’s EducationChild’s Education
Child’s MarriageChild’s Marriage
HousingHousing
22 yrs22 yrs 38 yrs38 yrs 10- 20 yrs10- 20 yrs
Post Retirement Years Post Retirement Years
INVESTMENT OPTIONS TO INVESTMENT OPTIONS TO REALISE YOURREALISE YOUR FINANCIAL DREAMS FINANCIAL DREAMS
GOLD
BANK FD’S.
SMALL SAVING SCHEMES
RBI BONDS
CO. DEPOSITS
EQUITY
MUTUAL FUNDS
Why equities in long run ?
108.32
10 9.69 10
12.13
10
18.47
0
2
4
6
8
10
12
14
16
18
20
InflationOther Asst
Bank FD
EquityCo’s DepositGold
Source: RBI Data from 1980 - 2008
THE BIGGER RISKTHE BIGGER RISKLOSS OF LOSS OF PURCHASING POWERPURCHASING POWER
But equities are risky?????
INFLATION YOUR ENEMY!(Assuming Inflation rate 7%)
RS. 10000 TODAY WILL BE WORTH……
• AFTER 5 YEARS RS 6957
• AFTER 10 YEARS RS 4840
• AFTER 20 YEARS RS 2342
• AFTER 30 YEARS RS 1134
EQUITY INVESTMENT??
EQUITY IS ‘EQUAL OWNERSHIP’ OF THE COMPANY
Returns from equities have trailed profit growth rates for very long
Long term returns from Equities = Profit growth rates + Dividends
Over 1871-2008(US MARKET)
real returns from US stocks : 7 % p.a.
real profit growth + real dividends yields : 6.7 %p.a.
What is Equity?
Sensex Growth from 1980 -2008
After all, in the last 28 years, we’ve seen ….
– Two wars
– At least three major financial scandals
– Assassination of 2 prime ministers
– At least 3 recessionary periods
– 10 different governments and
– An unfair share of natural disasters, yet
However had one invested in the Sensex Rs 1 lacs in 1980 it has grown to 170 Lakh equivalent to GDP growth of 17%
EQUITY MARKET-DRIVERS
FUNDAMENTALS
LIQUIDITY
SENTIMENTS
Markets appear promising
Strong GDP growth
Agriculture can provide extra kicker
Services leading to employment opportunities.
Demographics in India’s favour
Infrastructure spending and Capex – Multiplier effect
Global Advantage spreading to other sectors
Strong corporate performance
Valuations relative to growth reasonable.
Flows, domestic and global expected to remain strong.
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
UK US
France Germany Japan
G6
Italy France Germany
Italy
Germany Japan
Russia
Brazil
India
China
BRICs
Italy
France
*cars indicate when BRICs US$GDP exceeds US$GDP in the G6
GS BRICs Model Projections.
Germany
When will India overtake the g6?
Source:Goldman Sachs BRIC’s* Model Projections*Brazil, Russia, India, China
WHY MUTUAL FUND ?
Definition of Mutual Fund
A mutual fund is a collective investment that allows many investors, with a common objective, to pool individual investments and give to a professional manager who in turn would invest this money in line with the common objective.
Why Mutual Fund?
Experience of managing funds across market cycles
Impeccable track record
Suitable for investors who value consistency in the long-term over short-term rewards
Benefits of Mutual Funds
Liquidity
Prof. Mgt.
Risk Diversification
Flexibility
Transparency
Regulated
Tax BenefitsPlus
CAN WE USE MUTUAL FUND FOR SAVING TAX?
THE SECRET OF BECOMING WEALTHY
“You don’t have to be wealthy to be an investor. . .
But…
You have to be an investor to be wealthy.”
What does the investor want?
Steady Returns
What do I do when interest
rates are volatile?
I don’t want too
much risk !!
What do I do when stock
markets volatile?
EQUITIES THROUGH EQUITIES THROUGH SIP OF MUTUAL SIP OF MUTUAL FUNDSFUNDS
BUILDING WEALTH DROP BY DROP
What is SIP?
We call it Disciplined Regular Investment
The Markets are volatile: they move up and down in an unpredictable manner
Invest a fixed amount, at regular, predetermined intervals and use the market fluctuations to your benefit
How does it help you:
• Light on pocket.
• Over time the market fluctuations are averaged
• RUPEE COST AVERAGING
• This leads to HIGHER RETURNS
•HELP IN ACHIEVING FINANCIAL GOALS!
How Do I Build Wealth?
There is simple and straight forward way
•Start investing early.
•Put time on your side.
•Invest regularly.
•Don’t worry about market timing.
BUT……….IT’S BORRING!
The alternative is to….
–Follow market very closely.
–Time your entry and exit very well.
–Select your stocks judiciously.
–And hope that you get it right more often than not!
THE CHOICE IS YOURS ………………..
Wealth Creation Principle is nothing
but “Enhancement Of future
Value”.
FV = PV (1 + r)n
To Create Wealth – Enhance Future Value?
The more you The more you save, makes save, makes a differencea difference
The The sooner sooner
you start, you start, makes a makes a
differencedifference
PV nr
The more The more you earn, you earn, makes a makes a differencdifferenc
ee
Power of Compounding
Einstein refers to the “Power of Compounding” as the “Eight wonder of the world”.
0
700
1400
2100
2800
3500
0 5 10 15 20 25
15%
10%
8%
Difference is quiet significant in long run.
Growth of Rs. 100
Equity Best Bet of Investments in Long Run
Delays affect wealth creation
Rs. 1000 invested p.m. @ 10% p.a. till the age of 60 yrs
The Power of Starting Early
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
25 30 35 40 45 50
If you start investing when you are (years)
We
alt
h o
n R
eti
rem
en
t
Gains from Investment
Investment
Just 5 years of delay reduces the
wealth by half!
AMT INVESTED RS.12,40,00O (12.4 Lakh)
RETURNS (COMPOUNDED ANNUALISED) 46.03%
WEALTH BUILD RS. 1,57,95,387 (1.57 Cr)
VALUE AS ON 31st Oct 06
Power of Compounding – QUIZ
Rs. 10,000 invested every month for a period of 30 years(TOTAL INVESTMENT WILL BE 36 LAKH)
At 8% -
At 15% -
At 20% -
1.5 crores
7.0 crores
23 crores
Postal Recurring
SIP in Equity Funds
SIP in Equity Funds
Conclusion – Strike the GOLDMINE Conclusion – Strike the GOLDMINE
START YOUR SIP
Investment Objective:
“The primary objective of the scheme will be to provide capital appreciation to its unit holders through judicious deployment of the corpus of the Scheme in sectors categorized under “basic industry” in the normal parlance and in context of the Indian economy, including but not limited to, energy, petrochemicals, oil & gas, power generation & distribution and electrical equipment suppliers, metals and building material.”
GROW WITH INDIA INVEST IN
MUTUAL FUNDS.
CONTACT
“Failing to Plan is Planning to Fail” Robin Sharma, Monk who sold his Ferrari
Thank You !!