Vikalpa Finvest

CONTENTS FINANCIAL PLANNING EQUITY SIP

Financial Goals Phase I Phase II Phase III Earning Years Child’s Marriage Child’s Education Housing Child birth Marriage 22 yrs 38 yrs 10- 20 yrs Earning Years Post Retirement Years Education Age- 22 yrs Age- 60 yrs

INVESTMENT OPTIONS TO REALISE YOUR FINANCIAL DREAMS GOLD BANK FD’S. SMALL SAVING SCHEMES RBI BONDS CO. DEPOSITS EQUITY MUTUAL FUNDS

Why equities in long run ? Gold Bank FD Co’s Deposit Equity Source: RBI Data from 1980 - 2008

THE BIGGER RISKLOSS OF PURCHASING POWER But equities are risky????? THE BIGGER RISKLOSS OF PURCHASING POWER

INFLATION YOUR ENEMY! (Assuming Inflation rate 7%) RS. 10000 TODAY WILL BE WORTH…… AFTER 5 YEARS RS 6957 AFTER 10 YEARS RS 4840 AFTER 20 YEARS RS 2342 AFTER 30 YEARS RS 1134

EQUITY INVESTMENT??

What is Equity? EQUITY IS ‘EQUAL OWNERSHIP’ OF THE COMPANY Returns from equities have trailed profit growth rates for very long Long term returns from Equities = Profit growth rates + Dividends Over 1871-2008(US MARKET) real returns from US stocks : 7 % p.a. real profit growth + real dividends yields : 6.7 %p.a.

Sensex Growth from 1980 -2008 After all, in the last 28 years, we’ve seen …. Two wars At least three major financial scandals Assassination of 2 prime ministers At least 3 recessionary periods 10 different governments and An unfair share of natural disasters, yet However had one invested in the Sensex Rs 1 lacs in 1980 it has grown to 170 Lakh equivalent to GDP growth of 17%

EQUITY MARKET-DRIVERS FUNDAMENTALS LIQUIDITY SENTIMENTS

Markets appear promising Strong GDP growth Agriculture can provide extra kicker Services leading to employment opportunities. Demographics in India’s favour Infrastructure spending and Capex – Multiplier effect Global Advantage spreading to other sectors Strong corporate performance Valuations relative to growth reasonable. Flows, domestic and global expected to remain strong.

When will India overtake the g6? Source:Goldman Sachs BRIC’s* Model Projections *Brazil, Russia, India, China

WHY MUTUAL FUND ?

Definition of Mutual Fund A mutual fund is a collective investment that allows many investors, with a common objective, to pool individual investments and give to a professional manager who in turn would invest this money in line with the common objective.

Why Mutual Fund? Experience of managing funds across market cycles Impeccable track record Suitable for investors who value consistency in the long-term over short-term rewards

Benefits of Mutual Funds Liquidity Prof. Mgt. Risk Diversification Flexibility Transparency Regulated Tax Benefits Plus

CAN WE USE MUTUAL FUND FOR SAVING TAX?

THE SECRET OF BECOMING WEALTHY “You don’t have to be wealthy to be an investor. . . But… You have to be an investor to be wealthy.”

What does the investor want? I don’t want too much risk !! Steady Returns What do I do when interest rates are volatile? What do I do when stock markets volatile?

EQUITIES THROUGH SIP OF MUTUAL FUNDS BUILDING WEALTH DROP BY DROP

What is SIP? HELP IN ACHIEVING FINANCIAL GOALS! We call it Disciplined Regular Investment The Markets are volatile: they move up and down in an unpredictable manner Invest a fixed amount, at regular, predetermined intervals and use the market fluctuations to your benefit How does it help you: Light on pocket. Over time the market fluctuations are averaged RUPEE COST AVERAGING This leads to HIGHER RETURNS HELP IN ACHIEVING FINANCIAL GOALS!

How Do I Build Wealth? BUT……….IT’S BORRING! There is simple and straight forward way Start investing early. Put time on your side. Invest regularly. Don’t worry about market timing. BUT……….IT’S BORRING!

The alternative is to…. Follow market very closely. Time your entry and exit very well. Select your stocks judiciously. And hope that you get it right more often than not! THE CHOICE IS YOURS ………………..

Wealth Creation Principle is nothing “Enhancement Of future Value”. but “Enhancement Of future Value”.

To Create Wealth – Enhance Future Value? FV = PV (1 + r)n n PV r The more you earn, makes a difference The sooner you start, makes a difference The more you save, makes a difference

Power of Compounding Growth of Rs. 100 Einstein refers to the “Power of Compounding” as the “Eight wonder of the world”. Difference is quiet significant in long run. Growth of Rs. 100 Equity Best Bet of Investments in Long Run

Delays affect wealth creation Rs. 1000 invested p.m. @ 10% p.a. till the age of 60 yrs Just 5 years of delay reduces the wealth by half!

AMT INVESTED RS.12,40,00O (12.4 Lakh) RETURNS (COMPOUNDED ANNUALISED) 46.03% WEALTH BUILD RS. 1,57,95,387 (1.57 Cr) VALUE AS ON 31st Oct 06

Power of Compounding – QUIZ Rs Power of Compounding – QUIZ Rs. 10,000 invested every month for a period of 30 years (TOTAL INVESTMENT WILL BE 36 LAKH) 1.5 crores 7.0 crores 23 crores Postal Recurring SIP in Equity Funds At 8% - At 15% - At 20% -

Conclusion – Strike the GOLDMINE START YOUR SIP NOW

Investment Objective: “The primary objective of the scheme will be to provide capital appreciation to its unit holders through judicious deployment of the corpus of the Scheme in sectors categorized under “basic industry” in the normal parlance and in context of the Indian economy, including but not limited to, energy, petrochemicals, oil & gas, power generation & distribution and electrical equipment suppliers, metals and building material.”

GROW WITH INDIA INVEST IN MUTUAL FUNDS.

CONTACT

“Failing to Plan is Planning to Fail” Robin Sharma, Monk who sold his Ferrari

Thank You !!