top of page


Updated: Jun 10, 2021

Q: If you don’t see any positive returns in your SIP, should you continue investing?

A: Do you sell your gold when you see the price going down? Do you cut a plant just because it is not bearing fruit within few months? Do you stop working out if you don’t lose weight? Few things take time.

Never as much as possible take out your money from your investment. Unless, you have invested for a specific period based on your goal and it’s time or if the fund is not that good anymore for which there could be plenty of reasons which your financial advisor will know and help you with.

Market works in cycle so your SIPs has bought you in high price as well as low price, which averages out your buying price. Let’s understand this with an example, suppose you invest ₹1000 every month and your fund NAV is ₹10. In first month you will receive 100units, if in second month it goes down by 1point, new NAV will be ₹9, your investment will buy 111.111 units. Third month NAV is ₹10 again, you will get 100 units.

What are your total units= 100+111.111+100= 311.111

Current NAV is ₹10

Current value of your investment will be = 311.111 x 10= ₹3111.11

Your total investment is ₹3000. Can you see your investment has grown even though NAV is same as your initial investment.

That is the power of SIP.


Q: If you only have small amount to invest, is it even worth it?

A: Investment is not just about making money, it is a habit one inculcates within himself that helps him in the future. Investing a small amount does not necessarily mean that you will never invest in future, it will show that you want to create a better future for yourself. By choosing not to invest that small amount, instead spending it will loosen your self discipline that you could have built. If you don’t save it today, there is a good chance that you will find other reasons not to save in the future as well.

Q: Is it better to invest in Indian Stock market or American Stock Market?

A: Thinking of investing in other stock markets definitely increases your diversity, however it is very important to be aware of the cost of investment as well, which is a topic that hardly anyone brings up. If there are good, low cost options available, it will be beneficial.

Companies have started to create a fund that includes companies that are not included on BSE and one can invest in foreign companies through these funds. Available option does not mean that the option is better, companies that the fund is investing in, charges that will incur to investor, conditions that are attached with investing in American stock market, taxation on the capital gain, etc. are few of the factors we will have to study to determine quality of the investment.

Q: What asset allocation you should use?

A: Well, it totally depends on your goals and the timeline you are setting to accomplish those goals. It also depends on your age as risk appetite in some cases is relatively lower as age progresses. It also depends on how much money you want to invest as first and foremost you should plan for retirement.

Broadly speaking, in the early stage a high proportion can be invested in medium risk funds such as mid cap and small companies. As time passes, the portfolio can be systematically shifted towards less risky A grade bonds (debt funds) and you also might want to keep a safety net in cash in case of emergencies. Percentage allocation can be determined by studying more about the individual investor depending on the above mentioned factors


Q: What are the risks in Investment?

A: If you are investing directly in individual stocks, this will be considered as high risk investment as it needs a great deal of research and understanding of a lot of concepts.

If you are investing based on top performing funds, it poses another risk as past performance does not guarantee similar future returns.

If you are investing into a sectorial fund based on assumption such as high growth in transportation or logistics or automobile any particular sector, this could be risky as your portfolio will be highly concentrated.

One can avoid these risks, either by directly investing in index funds or contacting a good financial advisor.


Q: I am 23 years old, should I already be saving up for retirement?