🍰 SIP Vs Lump Sum 🎂कौनसा बेहतर? Mutual Fund Investment | SST Ep 01

Summary

Welcome to 'SMART STOCK TIP', a new series on Labour Law Advisor focusing on stock market investments. Learn about Lump Sum vs. SIP (Systematic Investment Plan) for mutual funds, and how SIP can potentially yield higher returns by avoiding market highs and lows. Discover the benefits of disciplined investing and the ease of starting with the KUVERA App, which offers personalized investment plans and the convenience of automated monthly investments.

Takeaways

• 😀 The video introduces a series called 'SMART STOCK TIP' aimed at helping both new and experienced investors in the stock market.
• 📈 The script discusses two investment methods in mutual funds: Lump Sum and SIP (Systematic Investment Plan), emphasizing potential for higher returns with the right approach.
• 💡 SIP is highlighted as a method that can potentially yield 15-20% more returns compared to other investment methods.
• 📱 Investment in mutual funds can be easily started through mobile apps like KUVERA, which offers free use and goal-based investment recommendations.
• 💰 The script provides a practical example of investing Rs.60K in mutual funds, contrasting Lump Sum investment with SIP.
• 📊 NAV, or Net Asset Value, is explained as the price of one unit of a mutual fund, which fluctuates like stock prices, affecting the number of units an investor can purchase.
• 🎯 The importance of timing the market for Lump Sum investments is noted, but the difficulty and impracticality of consistently doing so is acknowledged.
• 🚀 SIP is presented as a solution to market timing issues, allowing investors to buy more units over time due to the averaging of purchase prices.
• 🌡️ SIP helps avoid the pitfalls of market highs and lows, providing a more stable and disciplined investment approach.
• 💼 The script suggests that SIP is ideal for those who may not have a large sum to invest at once but can invest a portion of their monthly income regularly.
• 🔔 The video ends with a call to action, encouraging viewers to like, subscribe, and turn on notifications for future updates from the Labour Law Advisor channel.

Q & A

What is the purpose of the 'SMART STOCK TIP' series in the Labour Law Advisor?

The 'SMART STOCK TIP' series aims to educate viewers on how to make informed decisions in the stock market, particularly focusing on how small changes can lead to significant profits in investments.

What are the two main investment methods discussed in the series for mutual funds?

The two main investment methods discussed are Lump Sum investment and Systematic Investment Plan (SIP).

What does SIP stand for in the context of mutual funds?

SIP stands for Systematic Investment Plan, which is a method of investing a fixed amount in mutual funds at regular intervals.

How can the KUVERA App benefit users who want to invest in mutual funds?

The KUVERA App benefits users by being free to use, allowing them to invest according to their goals, and recommending different mutual fund schemes based on their income and expenses.

What is the advantage of investing in mutual funds through the KUVERA App compared to opening a Demat account?

The advantage is that users can start investing in mutual funds through the KUVERA App without needing to open a Demat account, making the investment process more accessible and straightforward.

What is the significance of NAV in mutual fund investments?

NAV, or Net Asset Value, is the price of one unit of the mutual fund. It is significant because it determines the number of units an investor receives for their investment amount.

Why is timing the market for mutual fund investments considered impractical and risky?

Timing the market is impractical and risky because even experienced investors often fail to accurately predict market movements, and relying on luck is not a smart investment strategy.

How does the Systematic Investment Plan (SIP) help in mitigating the risks associated with market timing?

SIP helps by spreading out investments over time, providing multiple opportunities to buy mutual fund units at varying prices, which averages out the purchase cost and reduces the impact of market volatility.

What are some of the benefits of using SIP for mutual fund investments mentioned in the script?

Benefits of SIP include avoiding market highs and lows, getting mutual funds at a good average price, maintaining liquidity by investing a portion of monthly income, and providing a disciplined approach to investing.

How does the KUVERA App help in automating the SIP investment process?

The KUVERA App allows users to set up automated monthly SIP investments, where a specified amount is deducted from the bank account on a set date, simplifying the investment process and ensuring consistency.

What is the potential downside if a user's bank account does not have sufficient funds for a SIP investment through the KUVERA App?

The potential downside is a minor bank charge, which might be around Rs. 5 to 6, but there is no significant penalty for insufficient funds in the account.

Outlines

00:00

📈 Introduction to Smart Stock Tips and Investment Strategies

The video script introduces a new series called 'SMART STOCK TIP' under the Labour Law Advisor brand, aimed at educating viewers about stock market investments. It highlights the importance of understanding investment strategies like Lump Sum and SIP (Systematic Investment Plan) to maximize returns. The script emphasizes that the right choice between these methods can significantly impact profits, potentially increasing returns by 15-20%. The presenter introduces the KUVERA App as a tool for easy and goal-oriented investment without the need for a Demat account. The app offers personalized mutual fund scheme recommendations based on the user's income, expenses, and financial goals, including retirement planning. Viewers are encouraged to download the app for a free trial and to take advantage of a promotional code for additional benefits.

05:06

💡 The Pros and Cons of Lump Sum vs. SIP Investments

This paragraph delves into the comparison between Lump Sum and SIP investments, using the example of a person named Ramesh who has Rs.60,000 to invest. It explains that Lump Sum investment involves putting all the money at once into mutual funds, while SIP involves investing a fixed amount monthly. The script illustrates how market fluctuations can affect the number of units one gets for the same amount of money, emphasizing the risk of investing at the wrong time. It points out that even if an investor times the market perfectly with a Lump Sum investment, there's no guarantee of a 17% gain, which contrasts with the potential immediate gain from market timing. The paragraph also addresses the impracticality of consistently timing the market and introduces SIP as a more reliable method to mitigate market volatility and achieve a good average price for mutual fund units over time. The benefits of SIP include avoiding extreme market prices, maintaining investment discipline, and providing flexibility for those who may not have a large sum to invest at once or wish to preserve liquidity. The script concludes by encouraging viewers to consider SIP for a more stable and less risky investment approach and mentions the KUVERA App as a convenient tool for setting up and automating SIP investments.

Keywords

💡Investment

Investment refers to the commitment of money or capital with the expectation of generating income or profit. In the video, investment is the core activity discussed, particularly in the context of the stock market and mutual funds. The script emphasizes the importance of making informed investment decisions to maximize returns, as seen in the comparison between Lump Sum and SIP investment strategies.

💡Stock Market

The stock market is a platform where shares of publicly traded companies are issued and traded. The video script introduces the series as beneficial for those interested in the stock market, indicating that the content will provide insights into investment strategies that can be applied in this financial marketplace.

💡Mutual Funds

Mutual funds are investment vehicles that pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. The script discusses mutual funds as a means of investment, explaining the two primary methods of investing in them: Lump Sum and SIP.

💡Lump Sum

A Lump Sum investment involves investing a large sum of money at once. The video uses the example of an individual named Ramesh who has the choice to invest his entire amount in mutual funds all at once, highlighting the risks and potential rewards associated with this approach.

💡SIP (Systematic Investment Plan)

SIP stands for Systematic Investment Plan, which is a method of investing a fixed amount of money at regular intervals, such as monthly. The script explains SIP as an alternative to Lump Sum, emphasizing its benefits like averaging out the cost of units over time and reducing the impact of market volatility.

💡NAV (Net Asset Value)

NAV, or Net Asset Value, is the value of each unit of a mutual fund, calculated by dividing the total value of the fund's assets minus its liabilities by the number of outstanding units. The video script uses NAV to illustrate the cost of one unit of a mutual fund, which is crucial for understanding the value of investments in mutual funds.

💡Market Timing

Market timing is the strategy of buying or selling investments based on predictions of market conditions. The script warns against relying on luck for market timing, as it is highlighted that even experts often fail to predict market movements accurately.

💡Demat Account

A Demat account is an account that holds investments in electronic or dematerialized form. The video clarifies that to invest in mutual funds, one does not necessarily need to open a Demat account, as investments can be made directly through apps like KUVERA.

💡KUVERA App

The KUVERA App is mentioned in the script as a tool for investing in mutual funds. It is described as free to use and capable of recommending investment schemes based on an individual's financial goals and circumstances, providing a convenient way to start and manage investments.

💡Retirement

Retirement is the period when an individual stops working and relies on savings, investments, or pensions for income. The script uses retirement as an example of a long-term financial goal for which one might use the KUVERA App to invest in mutual funds and plan for financial security in the future.

💡Disciplined Investment

Disciplined investment refers to a systematic approach to investing, often involving regular contributions over time. The video script promotes the benefits of SIP as a disciplined investment strategy, allowing individuals to invest a portion of their income regularly, leading to a significant accumulation of wealth over time.

Highlights

Introduction of the SMART STOCK TIP series, aimed at guiding investors on stock market investments.

Discussion on two investment methods: Lump Sum vs SIP (Systematic Investment Plan).

Potential for 15-20% higher returns with the right investment strategy.

No need to open a Demat account for Mutual Fund investment; mobile apps like KUVERA facilitate easy investment.

KUVERA App offers free use and goal-based investment recommendations.

Example of Ramesh with Rs.60K to invest, illustrating Lump Sum investment.

Explanation of NAV as the price per unit of a Mutual Fund.

Risk of investing at the wrong time, resulting in a potential 17% loss.

The impracticality of timing the market and the role of luck in investment.

Introduction of SIP as a method to earn medium returns without relying on market timing.

SIP allows investment at different times, reducing the impact of market highs and lows.

Benefits of SIP: avoiding market extremes, disciplined investment, and maintaining liquidity.

Motivation for investment at any time without the hassle of market research for Lump Sum.

KUVERA App's feature for automating SIP investments and handling insufficient funds without heavy penalties.

Encouragement for viewers to like, subscribe, and stay updated for important future videos.

Outro music signifies the end of the video.

Transcripts

Hello everyone, welcome you all to the brand new series of Labour Law Advisor

which is named SMART STOCK TIP.

If you are interested in investing in the stock market or have already invested in it.

In both cases, this series will prove beneficial for you

because over here we will tell you what kind of little changes can make in your investments

with the help of which you can make huge profits.

So today I will discuss with you the two ways by which you can put your money into mutual funds

i.e., Lump Sum vs SIP

SIP Means Systematic Investment Plan. Many people ignore these both concepts

but think if I will tell you that one out of these two ways can help you in making at least 15-20℅ more on your returns

and if you are putting money by using other methods then you can lose these returns.

So are you interested in knowing this,

If you are interested in knowing how it is possible & which plan is better for a different person

so watch this video till the end then you will understand it.

If you don't know this then let me tell you that to invest in Mutual Fund you don't need to open Demat A/C.

In today's era, you can start such investments through your phone.

The App which I use is KUVERA App

the big benefit of using this app is it is free to use,

& 2nd benefit is that through this App I can invest the money as per my goals.

If I selected that my goal is for saving money for my retirement

So this app based on my income & expenses will recommend me different schemes of Mutual Fund

so that I can start my investment from today itself

then after a given time, my goal will be achieved.

And after considering future dearness it will tell you the realistic goals

so that you can start with a real investment plan.

The link to download this App is given in the description below

Or if you type the code i.e., LLAYT then you will get 100 free points

which you can use for In-app purchases.

Let me explain this to you through an example- there is a man named Ramesh who is having Rs.60K

and he wants to invest Rs.60 K in Mutual Fund.

If he chose to invest the whole of Rs.60 K in Mutual Fund at one time only

or if he chose to invest Rs.30 K & Rs.30 K in 2 different Mutual Fund at one time

Such type of investment is known as Lump Sum Investment.

This means he put all his money at one time in Mutual Fund.

But if Ramesh is not doing this & investing Rs.5 K monthly in any Mutual Fund

then it is known as the Systematic Investment Plan which is a monthly investment.

Let's consider if a person is putting Rs.5K monthly then 10 units are allotted to him which means 1 unit= Rs.500/-.

Just like in the case of the share market where before investing you look at the price of a particular share.

Similarly when you invest in mutual funds then you get particular units of Mutual Fund

the value of which is known as NAV which is a price of 1 unit of the mutual fund.

In our example, that price is Rs.500. Pay attention in the case of the share market the way price goes up & down.

Similarly, in the case of Mutual Fund, the price of units goes up & down.

Suppose Ramesh decided to invest his money & he decided to invest in Mutual Fund

& he also decided in which Mutual Fund he will invest his money.

For example, let's take Aditya Birla Equity Growth Fund.

Now he has to decide whether he wants to opt for a Lump Sum investment

where he will put all his money at once

or he can opt for SIP where investment is done monthly.

Now he has taken the decision where he wants to put money in Lump Sum.

I am telling you this example from 1st Jan 2018 to 31st Dec 2018

In this period, we have tracked the price of Aditya Birla's Equity Growth Fund

& collected the data for you people.

Now suppose Ramesh is investing money in Lump Sum so he will get the opportunity only once in this case

& on the day where he made this investment was that day of 2018 where the Mutual Fund's one unit

was very less and that day was the 26th October 2018.

On this day, Mutual Fund NAV was Rs.643/- which is the lowest of 2018.

If at this unit price, Ramesh is investing Rs.60 K then he will get 93.2 units.

Now suppose he is very unlucky & he chose that day of 2018 when the NAV of Mutual Fund was at its high.

Means 31st August 2018 where he will get only 79 units of Birla Equity Growth Fund.

So you can see if his luck is on his side he chose a good day for investment then he will get 93.2 units

& if he chose a bad day for his investment then he will get only 79 units.

Means between 93 units and 79 units there lie a loss of 17% if he invests at the wrong time

& 17% is not a small deal.

If Ramesh remain invested in this Mutual Fund for at least one year

then also there is no guarantee that he will see a gain of 17%.

But if you have timed the market on the day of purchase of Mutual Fund then would have gained the profit of 17%.

Now I have told you it's important to time the market but it's important to know that it is not practical.

Many good stock market experts fail to time the market.

So here luck also matters but as a smart investor one should not rely on luck.

So can there be any method where without relying on luck one can earn a medium return on their investment &

you will not lose 17% & will also get the midway to get through this.

So let's look at this Mutual Fund last year graph means of 2018.

Watch this graph for 1 minute & tell me will this graph go up or down from this point

think in your mind & if it takes time then pause this video.

Now you have understood that it's difficult to predict this

so friends what you can do which will help you in purchasing Mutual Fund at low prices

so that the return which is about to get will not be eaten up by the market high price.

This problem will be solved through SIP which is a 2nd way of investing money in Mutual Fund.

Let's come again to Ramesh.Now suppose Ramesh he does not choose Lump Sum

& puts Rs.5 K on the 7th of every month which means he purchased Mutual Fund 12 times in a year

where he got 86 units of Mutual Funds

which is much more than 79 units so in this way by using SIP Ramesh can beat the market dynamics.

And in this manner, he will not fall prey to high market price because he is having 12 opportunities in a year

to buy a Mutual Fund & in all 12 opportunities Mutual Fund will be at its high there is a very less probability

so there is a lot of benefits of SIP which you have seen through one example

that it can save your earnings from being lost.

Other benefits are SIP helps in avoiding market highs & lows

and helps in getting Mutual Fund at a good average price which in itself is a big benefit

like we have already seen in an example that with this practice you can save a minimum of 5 to 6℅ on a return.

2nd point is that you may not have a big amount like Rs.60 K to invest

or if you have then also you don't want to invest such a big amount

because you want to maintain your liquidity but you generate monthly income either from salary or business.

So you can invest some percentage of that income & if you made SIP then you can make a disciplined investment.

And at the end of the year, you would have invested a very good amount.

3rd benefit is that you can get the motivation for investment anytime.

I can say this with a guarantee that people who are watching this video

out of the many had not made their even 1st investment in Mutual Fund also.

It can happen that after watching this video you will get the motivation for making investments

but if you want to invest in a lump sum then you have to solve many other problems

because after watching this video you would have understood the problems in lump sum investment.

Now if you get motivation for investment then you have to waste your time & energy

in studying the Mutual fund that you want to purchase whether it is available at a high price or low price.

And it may be the case that after doing lots of research you have made your investment in a lump sum

& after that also there is no guarantee because the prices of a mutual fund can fall the very next day.

SIP will solve this problem & you can start your SIP investment.

For starting your investment you can download the KUVERA App

as I have already stated at the starting of this video

and you can automate your monthly SIP which means an amount will get deducted from the bank on a set date.

If you are afraid that if your bank does not have funds then you will be charged with a penalty

then this is not there. It may be the case you have to pay Rs.5 to 6 as a bank charge

but you will be levied with no significant penalty.

Friends if you like this video then do hit the like button to indicate us

and subscribe to our channel and press the bell icon

because very soon we will update very important videos.

Very soon we will meet again through our new videos. Signing off team Labour Law Advisor.

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