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Systematic Investment Plans, or SIPs, are built on one simple idea: consistency. By investing a fixed amount at regular intervals, SIPs average out buying costs and let compounding work in the background. But many investors lose these benefits by pausing instalments when markets fall or waiting for the “right...

16,477 görüntüleme • 1 yıl önce •via X (Twitter)

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Cylla Kavanaugh

14,730 görüntüleme • 3 ay önce

SHORT POST: Time for contra #SIPs? Since SIP has become the new LIC. A herd behavior Quoting from the movie “Drishyam 2” “Sawaal ye nahin hai ke aapke ankhoon ke saamne kya hai. Sawaal ye hai ki aap dekh kya rahe hain ? “ #FIIs don’t matter anymore in Indian markets as they hold just 15% of market now. However, FIIs are speaking with their money. They’re selling. They see these prices as an opportunity to exit. But the focus on FIIs is a distraction. With 85% of Indian markets held by domestic money, the valuation is purely a function of how domestic investors value India. It is also a function of fund flows & your SIPs. Indian markets have capital controls. So money can’t freely invest outside. This makes the market overvalued compared to other developed peers like UK, Korea, Japan, etc where investors don’t have such restrictions. Promotor holdings have dropped from 48% to 40% in last few years. This should make investors think. While you’re buying, the owners are selling. Why ? Even the erstwhile US registered firms are now registering in India to list on #NSE. It’s not out of patriotism. It is because India is now listing the most expensively priced #IPOs. Everyone wants that. Real money is made by going against the herd. #SIPs are now a popular herd strategy. Hypothetical SIP works as nobody was doing that before. Now that everyone does that, it may not work anymore. A herd strategy doesn’t make money. Popular strategy becomes a #LIC. A generation invested there building dream castles. Nothing happened. These policies provided 5% returns when FDs were at 15% interest. SIPs are being used to buy expensive new #IPOs that is being leveraged by private equity players for smarter exits. This strategy can never make money for retail. Everyone is trying to time the listings here. Isn’t it fair for the investors also to “time the SIPs”?. Five years later, probably by 2030, most of us would realize that SIPs at these high valuations were poor investments. They are unlikely to provide the 15% to 25% returns that most are secretly plugging into their excel sheets. It has not worked anywhere outside the US market. How are you so sure? What will work is being smart about the strategy. Stop SIPs when markets are expensive & do a FD SIP. But when ,markets drop 20% or more, pull the funds into equity. This could be the only way to make more than 12% to 15% returns. It’s not for everyone but this is the only strategy. FIIs are timing. Promotors are timing. IPOs are timing. Everyone is timing the markets. Why shouldn’t you do the same?

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277,554 görüntüleme • 1 yıl önce

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