THERE ARE IMPORTANT FINANCIAL GOALS IN LIFE CHILD’S MARRIAGE Good plans shape good decisions. That's why good planning helps to make elusive dreams come true. Geoffrey Fisher CHILD’S YOUR OWN HIGHER EDUCATION RETIREMENT The one thing we can do is invest in the quality To enjoy a long, of education, especially higher education. comfortable retirement, save more today. Ron Kind Suze Orman GAP GAP GOAL ACHIEVEMENT PROGRAMME THROUGH MF SIP’S
Presenting GAP GAP GOAL ACHIEVEMENT PROGRAMME THROUGH MF SIP’S Dear Investors, NJ GAP is an idea to help you achieve your long-term goals at the right time by investing systematically in the right avenues through Systematic Investment Plan (SIP). NJ GAP helps you direct your savings to meet the goals, obligations & dreams like buying a house, higher education, marriage, retirement, luxury etc. and enjoy life. We believe that with proper planning, right approach and disciplined behaviour anything is possible to achieve in life. Wishing you all the best. GAP GAP GOAL ACHIEVEMENT PROGRAMME THROUGH MF SIP’S
INFLATION THE BIGGEST HURDLE IN YOUR FINANCIAL GOALS ACHIEVEMENT As per RBI estimates WPI inflation has grown by 6.8% in the last 30 years How Inflation is eating your Money 1990 R 1,00,000/- 1995 R 65,908/- GOLD PETROL DIESEL MILK 2003 1990 3200 9.84 4.08 6.00 R 33,825/- 2003 5600 32.49 21.21 13.00 2015 2015 26720 70.95 60.11 50.00 Actual Inflation 9.2% 8.6% 11.9% 9.2% R 13,518/- Reduced value of money @ 8% inflation p.a. Source : RBI, Bloomberg, NJ Internal GAP GAP GOAL ACHIEVEMENT PROGRAMME THROUGH MF SIP’S
INFLATION CHILD’S HIGHER RETIREMENT EDUCATION HOUSE HOLD EXPENSE HIGHER EDUCATION 2005 2015 2025* 2005 2015 2025* R 15,000/- R 25,000/- R 60,000/- R 3.16 lacs R 18.70 lacs R 36 lacs Fees of PGDBM in IIM Bnagalore, Source: Times of India MARRIAGE COST 2005 2015 2025* CHILD’S R 4-5 LACS R 10-12 LACS R 25-30 LACS MARRIAGE PLANNING *Cost in the year 2025 assumed at 8% inflation p.a. on 2015 prices GAP GAP GOAL ACHIEVEMENT PROGRAMME THROUGH MF SIP’S
ACHIEVING GOALS THE RIGHT WAY TO CREATE LONG-TERM WEALTH? Buying potential BIG WINNING STOCKS? Successfully TIMING MARKETS Following “EXPERT” recommendations Saving a LOT OF MONEY GAP GAP GOAL ACHIEVEMENT PROGRAMME THROUGH MF SIP’S
THE RIGHT WAY SIMPLE , SMART & TIME TESTED FORMULA TO ACHIEVE GOALS START EARLY + INVEST IN RIGHT ASSET CLASS + SAVE REGULARLY = GOAL ACHIEVEMENT GAP GAP GOAL ACHIEVEMENT PROGRAMME THROUGH MF SIP’S
START EARLY GIVE TIME TO YOUR INVESTMENT RATHER THAN TIMING AND BENEFIT FROM THE ‘POWER OF COMPOUNDING’ Systematic investing has a compounding effect on your investments. In the long term, an investment as low as R 5000/- per month swells up into a huge corpus. This can be best explained by the following graph. The graph shows advantages of starting early. If an investor starts early, even with lower invested amount he can create a large corpus. 5.70 CRORES MR GUPTA MR SAXENA SAVING STARTING AGE 25 YEARS 45 YEARS R 5,000/- R 15,000/- MONTHLY SAVINGS SAVING TILL AGE 60YRS 35 YEARS 15 YEARS R 21 LACS R 27 LACS TOTAL AMOUNT SAVED R 5.70 CRORES R 0.92 CRORES WEALTH AT AGE 60 YRS 0.92 CRORES 25 YEARS 45 YEARS 60 YEARS The above example is merely an illustration to explain the benefit saving at an early age. Returns are assumed at 15% CAGR. Assumed that SIP investment are done regularly every month. No guarantee or assurance of return is being offered by any mutual fund or NJ. The actual result may vary from depicted results depending on scheme selected. GAP GAP GOAL ACHIEVEMENT PROGRAMME THROUGH MF SIP’S
RIGHT ASSET CLASS EQUITY MARKET HAS OUTPERFORMED ALL OTHER INVESTMENT AVENUES Growth of Rs. 1,000 in Different Asset Classes 18 110000 1,02,826 Actual Gain Real Gain 15.7 16 90000 14 12 70000 9.9 9.4 9.4 10 8.9 8.3 50000 8 6.9 6 30000 20,162 17,442 17,352 4 2.9 15,046 2.4 2.4 1.9 10000 8,241 2 0 0 INFLATION GOLD SILVER BANK DEPOSITS CO. DEPOSITS SENSEX INFLATION GOLD SILVER CO. DEPOSITS BANK DEPOSITS SENSEX Growth in Different Asset Classes from March 1981 - March 2014 Source: Gold-Handbook of Statistics on Indian Economy, RBI. Silver - Handbook of Statistics on Indian Economy, RBI. Sensex - www.bseindia.com, Slide of PPT of HDFC MF. Co Deposits - assumed (1% higher than Bank FD Rate). Bank Deposits - Handbook of Statistics on Indian Economy, RBI. Inflation - Handbook of Statistics on Indian Economy, RBI It is evident from the graph that in the long term, equity investments have outperformed other investment avenues and has beaten inflation by a huge margin. + Equity mutual funds over a long-term Liquidity, Transparency and Convenience horizon offer better risk-return pay off GAP GAP GOAL ACHIEVEMENT PROGRAMME THROUGH MF SIP’S
INVEST REGULARLY DISCIPLINED INVESTING THROUGH SYSTEMATIC INVESTMENT PLAN (SIPS) Every investor dreams of buying at ( R ) ( R ) ( R ) a low price and selling at a higher 1 10 1000 100.00 4000 400 price. But, how does one know 2 8 1000 125.00 0 0 whether any given time is the right 3 9 1000 111.11 0 0 time to buy or sell? Many retail 4 11 1000 90.91 0 0 427.02 400 investors try to judge the market ( R ) 4697.22 @ NAV R 11 4400 @ NAV R 11 movements and end - up losing 9.36 10 their money in the long term. The above example is merely an illustration of ‘Rupee Cost Averaging’. The NAVs and returns generated are purely indicative and do not depict the performance of any mutual fund scheme. The actual results may vary A more successful strategy is ‘Rupee from the depicted figures. No guarantee or assurance of return is being offered by the Mutual Fund or NJ. Cost Averaging’ wherein you invest a fixed amount regularly. Thus you Rising Market Falling Market purchase more when the price are low and purchase less when prices Market Unit Purchased Market Unit Purchased are high. SIP investments takes SYSTEMATIC INVESTMENT PLAN (SIP) AN IDEAL WAY TO REDUCE RISK advantage of this strategy. AVERAGE COST PER UNIT < AVERAGE PURCHASE PRICE PER UNIT GAP GAP GOAL ACHIEVEMENT PROGRAMME THROUGH MF SIP’S
SENSEX RETURNS EQUITY NOT RISKY IN LONG TERM 266.88 81.76 53.04 34.71 33.94 27.40 -46.78 -15.21 -4.77 -2.09 2.24 6.49 24.85 18.00 17.50 17.11 16.65 15.66 35 33 31 26 24 21 23 27 28 25 24 21 12 6 3 1 0 0 34.29 18.18 9.68 3.85 0.00 0.00 Reducing probability of loss with increased investment tenure Past Performance may or may not sustain in future. The scenarios depicted herein above is for illustration purpose only and do not represent any forecasted performance. The above data shows returns for investments done in sensex every year on 31st March starting from 1979 till 31st March 2014 and is based on data available on www.bseindia.com which depicts performance of BSE sensex over a period of time. It shall not be construed to be indicative of scheme performance in any manner. GAP GAP GOAL ACHIEVEMENT PROGRAMME THROUGH MF SIP’S
TIME IS IMPORTANT MARKET TIMING DOES NOT MATTER OVER THE LONG TERM “Best market timing (almost impossible) has yielded less than 2% additional return than systematic investment. Time to go systematic.” INVESTING IN THE BSE SENSEX - 26 YEARS 15.34% 14.10% 12.70% Period from Jan 1988 to December 2014 Data source: www.bseindia.com; capitalmarket GAP GAP GOAL ACHIEVEMENT PROGRAMME THROUGH MF SIP’S
SENSEX RETURNS YEAR SENSEX INVESTMENT 1979 100 R 1,00,000 2014 27,499 R 2,74,99,000 *As on 31 Dec 2014 IN PAST 36 YEARS BSE SENSEX HAS GIVEN 17% RETURNS (CAGR) SENSEX HAS DELIVERED THESE RETURNS INSPITE OF Two Wars 10 different governments Major financial scandals An unfair share of naturals disasters Assassination of 2 Prime Ministers Global crisis like Dot Com bubble of 2000 and Sub Prime crisis of 2008 At least 3 recessionary periods GAP GAP GOAL ACHIEVEMENT PROGRAMME THROUGH MF SIP’S
POWER OF COMPOUNDING DO YOU KNOW? At the Rate of 15% Compounding what will be the value of R 1/- After 5 years After 10 years R 2/- R 4/- Albert Einstein once noted that the most After 15 years After 30 years powerful force in the universe was the principle of compounding. R 8/- R 64/- Give maximum TIME to your investment to get most of POWER OF COMPOUNDING GAP GAP GOAL ACHIEVEMENT PROGRAMME THROUGH MF SIP’S
SYSTEMATIC INVESTMENT PLAN (SIP) Systematic Investment Plan (SIP) is a tool that allows you to invest in mutual funds through small, periodic installments. SIPs help you set aside a fixed amount every month for investments thus contributing towards your goals. For Investment purpose, we often wait to collect a large amount of money and investment it all at once. Through SIP you can start with smaller amount on a monthly basis and create wealth over the long term. GAP GAP GOAL ACHIEVEMENT PROGRAMME THROUGH MF SIP’S
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