Smart Investor’s Preference (SIP)

25 Years What is the Average Age when one starts Earning?

What is the Average Retirement Age? 60 Years

Rs.15,000/- p.m. What is an Average Income of an Middle-Class House-hold?

Rs.5,000/- p.m. How much can a person save on a regular basis?

If a person can save Rs.5,000/- per month What will be his wealth when he retires? Assuming: He increases his investments by 5% every year Invests in an Asset class that gives returns of 20%

At Age 60 his wealth would have been Rs.27 Crores

4.90 Crores* 27 Crores* 40 years 25 years60 years RamShyam Savings Starting Age2540 Savings - Monthly SIPRs.5,000/-Rs.15,000/- Saving Years till age 6035 years20 years Total Amount Saved (appx.) Rs.57 lacsRs.62 lacs Starting Early Give time to your investments rather than timing Assumptions: (a) Savings grows at 5% annually (b) Returns assumed at 20% CAGR Give time to your investments rather than timing

Builds wealth over the long term –Just Rs per month invested for 17 would grow to Rs. 8 lacs…could be used for your daughter’s marriage Take advantage of market volatility –Buy more when the markets are down Rs. 10,000 worth of Gold bought every month Highest price Lowest quantity Lowest price Highest quantity 20 grams 15 grams Invest Regularly

Myth: Timing is essential to generate high returns Reality: It is the time and not the timing that matters Is it worth the risk or the tension? Who can time the market to perfection? Not even the experts can !! On the worst day to buy (highest sensex each yr) The result Invested a fixed amount in BSE Sensex annually for 25 yrs On the best day to buy (lowest sensex each yr) 15% p.a. 17% p.a. Invest Regularly

It is the small drops that make an ocean!! Relieves you of the last minute pressure Slow and steady wins the race –E.g. Split your Sec 80C investments into smaller amounts and invest every month Reduces the risk of investing at the wrong time –Difficult to predict the market and know when is the right time We earn regularly; We spend regularly Shouldn’t we also invest regularly? Invest Regularly

A small amount invested regularly can grow to substantial lumpsum …….It all adds up! Rs.21.7 lakhs 30 Rs.1000 invested every month for 30 Invest Regularly

One time investment of Rs.1 lakh invested for 30 6% % lakhs66.2 lakhs Earn more…it can make a big difference EARN MORE

Power of Compounding - QUIZ Rs. 10,000 invested every month for a period of 30 years At 8% - At 15% - At 20% crores 7.0 crores 23 crores Postal Recurring ?????? EARN MORE

The Formula for Creating Wealth Create Wealth Start Early Invest Regularly Make your money work hard for you Earn More

The Million Dollar Question I am convinced that I should save and invest regularly, but the million dollar question is… Where should I invest?

Risk Return Spectrum Savings Bank/ FD Liquid Funds PPF, NSC, KVP, PO Deposits, RBI Bonds Debt Funds Gold Real Estate Equity Risk Return potential LowHigh Low High Note:The above chart is for illustrative purpose only and is not marked to scale. The chart is based on our perception of the risk and return potential of various investment avenues

Equities- The Most Attractive Asset Class Equities have outperformed all other asset classes in the long run - globally as well as in India Source :CLSA Cumulative annualised returns ( )

Do you agree? Which product among all above has the potential to create greatest wealth for you? Equities …

Risk?? Returns are unsure! Equity – owners’ risk Volatility of returns Market Risk Sentiments in ST, Herd Mentality

Investor’s Psyche - Wrong emotion dominates at wrong time FearHope The Cycle of Fear, Greed & Hope Greed

Simply put …

Sensex Company Deposits Bank Deposits Inflation Gold Equity market (represented by BSE Sensex) has outperformed all other investment avenues Selecting Right Asset Class

In past 27 years BSE Sensex has given about 19.5% returns Past Performance (BSE Sensex) YearSensexInvestment Rs ,00, ,0001,30,00,000 This is in spite of … 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

Using the Wisdom We can direct our savings in such a manner that we create wealth, the way we wish DISCIPLINED SAVINGS + SUFFICIENT TIME + RIGHT ASSET CLASS = Smart Investor’s Preference

What is SIP Invest a fixed amount, at regular, predetermined intervals and use the market fluctuations to your benefit DatesMonthly InvestmentNAVUnits Alloated 11-Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TOTAL Average NAV13.67 Average Cost per unit

A Snapshot of poor performing schemes

A Snapshot of better performing schemes

Start an SIP today and Sit back and Relax