Rs 8,532 crore: The inflows into mutual funds through the systematic investment plan (SIP) route touched an all-time high of Rs 8,532 crore in January, shows data from the Association of Mutual Funds in India (Amfi).
- January, in fact, was the 14th consecutive month during which SIP inflows remained above Rs 8,000 crore.
- This data points to the growing maturity of retail investors, who have accepted that volatility is an intrinsic part of equity markets.
- The message that SIP helps you benefit from volatility by averaging out your cost of purchase also seems to have sunk in.
- The hardest part about equity investing is continuing to put in money when the markets are performing poorly. In 2019, large-caps performed well but mid- and small-caps languished.
- It seems retail investors are increasingly realising that they need to have an investment horizon of at least seven years to neutralise the impact of volatility and earn the high returns that equities are capable of providing.
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A few links for further reading
Invest and emigrate
The great Indian dream of settling abroad is achievable if one has a few crores to invest. Rich nations offer a variety of investment options in a quid pro quo arrangement: immigrants get a better quality of life and revenue from them helps these countries’ finances. Wealthy Indians, troubled by polluted cities and the red tape holding up entrepreneurship, may want a quick ticket out of the country. Sanjay Kumar Singh lists a range of options: from a Canadian province’s investor programme to America’s US EB-5 plan.
Small savings schemes
Investors in small savings schemes breathed a sigh of relief when the government announced on October 1 that interest rates on these instruments would not be revised for the fourth quarter of the calendar year. With the economy witnessing a slowdown, and the stock markets also turning volatile, many investors are looking for alternative avenues to park their savings. Small savings schemes, with their sovereign guarantee, have emerged as a viable alternative.
Hard path to growth
The signals for the economy are not positive: overall demand is yet to pick up; the share of total exports in India’s GDP is declining, and industrial output pattern remains worrying.