Shun Your Fund Manager, Start Your Own Systematic Investment Plan (SIP)

If you ever thought that your mutual fund is indeed an expert on market and can do wonders for you, it is time for rethink. Rethink! Yes indeed. Mutual fund managers fail to outperform the index against which their schemes operate. In India, failure rate is as high as 65% which means 2/3 of fund managers do not perform even as good as the benchmark.

So what should you do? The answer is simple. Start your own SIP i.e. Systematic Investment Plan. The method to be used is simple. Set aside Rs. 10000. You can even start with Rs. 5000 but it better to start with 10000 as the options increase and you can get good diversified portfolio with this kind of money. After you have made, the first investment, all subsequent investment needs to be in multiple of Rs. 5000. You can have this investment every quarter, if you cannot afford it monthly. But it is better to have it monthly.

How would your asset allocation look like? I am suggesting an asset allocation to start with which should be like this:

Stock	Investment (In Rupees)	Weight age
ITC	Rs. 2000	20%
CRISIL	Rs. 2000	20%
HDFC Bank	Rs. 2000	20%
Havell	Rs. 2000	20%
HUL	Rs. 2000	20%

This asset allocation can help you a portfolio which is driven by common sense and looks at the strength of business and does not depend on business valuation. Please remember to stay invested for at least three years. This asset allocation will ensure that you end up having a good return of 15% to 20% even in adverse market conditions as these stock have been found to be doing well in all phases of market.