Nvesting Verview: o o o o o o

INVESTING OVERVIEW
Most of us will earn and spend money throughout our lives. Along the way, we will make pretty big decisions, which could involve spending more than our income provide like: o Home o Education expenses o Weddings o Holidays o Medical care o Retirement ( Increased life expectancy, Standard life, Nuclear family system). So, how do we make sure that we have enough money to meet all our goals? Yes, you are right! By investing
WHY DO I NEED TO INVEST?

Inflation eats up ordinary savings
Did you know that though your money may be physically safe in a savings account, its not risk- free?
For instance, if you have Rs. 10,000 in a savings account earning 3.5% annual interest, in 20 years time your savings would be worth Rs. 19,898. However, if inflation is about 7%, Rs. 19,898 would only be worth Rs. 5,142 in todays terms!
Adjusted for inflation, your savings account gives you an annual return of 3.27% Note: Food inflation was reported 17.05% on 3-Feb-2011.
IMPACT OF INFLATION:
WHEN SHALL I INVEST?

The earlier, the better
The sooner you start, the more time your money will have to grow as you benefit from the power of compounding- When the interest on your investment also starts to grow. Here is an example that demonstrates the difference time can make to your savings : If you started investing Rs. 5,000 a month on your 40th birthday, in 20 years time, at 12% annual interest your money will grow to approx. Rs. 50 lakhs when you reached 60. However, if you started investing 10 years earlier, your Rs. 5,000 per month would be worth Rs. 1.76 crores on your 60th birthday. Notice the difference!
GRAPHICAL REPRESENTATION
INVESTING OPTIONS
Different options for different people
Different investments suit different people at different stages in their lives. And each one has its own level of risk and reward. The basic rule of thumb? The greater the risk, the greater the potential reward. And vice versa. Here is a broad description of some investment options:
Gold and Real Estate
Post office schemes ( PPF, KVP, NSC, POMIS, Term Deposit, SCSS, RD etc.)
Savings account and Bank deposits FD, Bonds and Debentures
Individual Equity Shares

Mutual Funds PMS Products.
RISK-RETURN OF INVESTMENT OPTIONS
EQUITIES
Champion in the long run
Equities are another name of shares. If a company does well , the value of your share could go up and vice versa. Over the long term, equities offer significant growth potential, but tend to fluctuate in the short term. For example, had you invested Rs. 1,00,000 @ Rs. 195 per share on 1-Jan2001 in SBI shares, your money would have grown to Rs. 14,46,590 @ Rs.2,821 per share on 3-Jan-2011 apart from the periodical dividends. That is a CAGR of 31%. Caution: Never invest in equities to make quick money. patience that pays in long run. It is your
SENSEX : BAROMETER OF INDIAN ECONOMY

Historical Movements:
25000
20000
20325 17473
15000 13827
Year Sensex
10000
9422 6626
9720
5000 2618 3437 3910 3114 3097 3658 3065
5209 3990
5872
3262 3384
1957 1027 0
SENSEX: HISTORICAL PERFORMANCE

1991Period 1995 CAGR% 31% 19912000 18% 19912005 13% 19912010 15% 19912011 15% Last 10 Last 5 yrs yrs 16% 13%
APPROACHES TO EQUITY INVESTING

We can enter into equity investment in the following ways:
1.
2. 3.
4.
Direct investment to individual shares Exchange Traded Funds ( ETFs) PMS Products Equity Mutual Funds
Well discuss more on mutual funds in the following slides.
MUTUAL FUNDS
Chances are that most of your money resides in a savings account. Bank deposits are generally safe, but have not been known to offer strong potential growth. Post tax and inflation, you might get negative returns on your hard earned money. But there are ways to make your money earn enough to beat inflation and earn you worthwhile returns.
And simplest way to earn handsome returns is to begin investing in mutual funds.
WHAT IS A MUTUAL FUND?

Simply put, a mutual fund pools together money from many investors just like you to make a large sum. The money collected is either invested in stocks, bonds and other securities , or in a combination of the three. As an investor, you are issued units in proportion to the money you have invested. Isnt that simple?
BENEFITS OF MUTUAL FUNDS

Professional Management Diversification Convenience Superior return potential Low costs Liquidity Transparency Flexibility Affordability Choice of schemes Well regulated Tax-efficient
TYPES OF MUTUAL FUNDS

Broadly, mutual funds are of two types:

Open-ended schemes
Close-ended schemes
Other than these two broad classes, there are three basic types of mutual funds
1. 2. 3.
Equity mutual funds Debt or income funds Cash or money-market funds
Other variants of the above three are schemes like Index funds, ELSS, Sector Funds, Gold ETFs, Balanced funds, MIPs, FMPs, Floating rate funds, Gilt funds, Fund of funds etc.
COMPARATIVE RISK AND RETURNS:
CHOOSING A MUTUAL FUND

Define your investment objective pinpoint what you are investing for. Define how long you can stay invested if you need your money back in short term, an equity fund is probably inappropriate as equity funds offer the best potential for returns over the long term. Define your risk tolerance and thereafter select a fund type that best meets your need.
INVESTMENT STRATEGIES
Lump sum investment Systematic Investment Plan ( SIP ) or Rupee cost averaging Systematic Transfer Plan ( STP ) Systematic Withdrawal Plan ( SWP ) Value- averaging Asset- allocation
SIP A SMART MOVE

Can you invest if you dont have a large sum of money? Sure. If you want to put aside just a small amount regularly, plan a SIP as part of your monthly budget.
Advantages:

Disciplined investing Convenience & Affordability Market neutral Control volatility Better returns Rupee cost averaging
POWER OF RUPEE COST AVERAGING

Unit Price (Rs.) 20 18 14 22 26 50000 20 2500 65000 LUMP SUM INVESTOR Amount invested Units bought 50000 2500 REGULAR SIP Amount invested Units bought 10000 10000 10000 10000 10000 50000 19 2609 67834 500 556 714 455 385
Month 1 2 3 4 5
Total Invested Average price paid Total units bought Value after 5 months
TAXATION
OF MUTUAL FUNDS
PERFORMANCE OF EQUITY MUTUAL FUNDS

Return of Select Equity Mutual Funds(CAGR%)
Equity Funds/Period HDFC Top 200 Fund Franklin India Bluechip Fund DSP BR Equity Fund 1 year 19% 16% 14% 3 years 11% 8% 9% 5 years 20% 16% 20% 10 years 29% 24% 25% 15 years 25% 26% 25%
Birla Sun Life Frontline Equity Fund IDFC Premier Equity Fund
12% 15%
8% 10%
19% 23%
Reliance Banking Fund
41%
17%
27%
WHY SAI SECURITIES?

Run by professionals Vast industry experience Competent advisory services Need- based Financial Planning ( Investment planning, Retirement planning, Income planning, Tax & Estate planning like POA, Will etc.) Software and Technology Process oriented Dedicated team for prompt services Reasonable advisory fees NRI Services Over 1000 delighted customers
PROCESS AT SAI SECURITIES:

We follow Financial Planning process given below:
Thank you for your patience and time!
E-mail: src@saisecurities.com Call: +91 9840047895 or satya@saisecurities.com +91 9940080626

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INVESTING OVERVIEW

WHY DO I NEED TO INVEST?

WHEN SHALL I INVEST?

Gold and Real Estate

Individual Equity Shares

RISK-RETURN OF INVESTMENT OPTIONS

SENSEX : BAROMETER OF INDIAN ECONOMY

5000 2618 3437 3910 3114 3097 3658 3065

SENSEX: HISTORICAL PERFORMANCE

APPROACHES TO EQUITY INVESTING

WHAT IS A MUTUAL FUND?

BENEFITS OF MUTUAL FUNDS

TYPES OF MUTUAL FUNDS

Equity mutual funds Debt or income funds Cash or money-market funds

COMPARATIVE RISK AND RETURNS:

CHOOSING A MUTUAL FUND

SIP A SMART MOVE

POWER OF RUPEE COST AVERAGING

PERFORMANCE OF EQUITY MUTUAL FUNDS

Reliance Banking Fund

WHY SAI SECURITIES?

PROCESS AT SAI SECURITIES:

Thank you for your patience and time!

E-mail: src@saisecurities.com Call: +91 9840047895 or satya@saisecurities.com +91 9940080626

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