1 SEP (Systematic Equity Plan) or SIP (Systematic Investment Plan)


Small bit of savings create the big corpus for future. It has been observed that stocks with good fundamentals are considered one of the best stocks prevailing. Selection of stock is an integral part while investing in Equities.

The performance in such equity stocks has proved to give phenomenal returns among all the other asset class, only when invested with discipline & for long term.

SEP (Systematic Equity Plan) or SIP (Systematic Investment Plan):
         Simple and disciplined approach towards investment
            Allows investing a small sum of money regularly to accumulate wealth
            Adopts Rupee Cost Averaging
            Basis of Investment could be Amount or Quantity
            Interval could be Daily/ Weekly/ Fortnightly/ Montly basis
Benefits:         
            Reduces Risk with Rupee Cost Averaging
            Investments made with small sum of money
            No need to time the market
            Helps in planning long term financial goal
            Inculcate disciplined approach towards Investment

Illustration :
Let us say you found XYZ Ltd a good fundamentals stock and bought 1,000 shares for 50 a share. A week later, prices are down to 40 and you are looking at a loss of 10,000. Now you wish you had waited and bought at 40. But what if it goes down to 35?
Let us look at an alternative strategy. What if you had invested a fixed sum of 10,000 every week? In the first week, you would buy 200 shares at 50. With the price down to 40 the next week, you could buy 250 shares. Refer to the table below

Month
Share price
Amount invested
Shares bought
1
50
10,000
200
2
40
10,000
250
3
35
10,000
286
4
30
10,000
333
5
50
10,000
200
Total

50,000
1269


Average Purchase Price            :           39
Current Market Price    :           50
Profit on Investment*    :           13,959
Profit on investment(%) :           28%
Profit on Investment: (50-39)*1269= 13,959

Some stocks are great for the SEP mode of investing. These are stocks we love to accumulate, in small baby steps. That's because they are Value Picks. They represent long term value. They are like solid assets. They are companies which we know are there for the long haul. Companies that have led, are leading and show promise of remaining market leaders in areas of business that show the promise of a long and prosperous life. SEP is best done in companies which we would love to own, if we could afford to. Such a company is tireless marathoner, has a solid, stable and ethical management; operates in a perpetual sunrise area with a never-say-die attitude. This is a company that stays focused on its line of business and is not an unsteady opportunity hunter.
Company Name
Company Code
ACC
ACC
Bharti Airtel
BHATE
Coal India
COALIN
HDFC Bank
HDFBAN
ITC
ITC
Larsen & Toubro
LARTOU
Maruti Suzuki
MARUTI
Reliance Industries
RELIND
State Bank of India
STABAN
Sun Pharma
SUNPHA
Tata Consultancy Services
TCS




   


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1 comments:

  1. Sir Thanks for sharing very Important Information. Can you give list of some Good Fundamentally Strong Stocks below Rs. 100 ..???

    ReplyDelete

Thanks for giving your valuable inputs, TRENDGURUS

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