AS MENTIONED In The Title

As stated in the name, the nature of this publishing is conceptual. It really is a survey for designing a profile that generates steady profits during every type of financial environment the trader is confronted with. This post is also an open up invitation to anybody who is willing to talk about valuable insights for enhancing the model.

The goal of this pursuit is not about generating optimum returns. Instead it is about creating a stock portfolio with a risk profile as close as is possible to cash, but with yields much higher than cash. The theory is to lessen the portfolio’s overall volatility by buying assets that normally move in contrary directions. One of the largest hedge money in the world, Ray Dalio’s Bridgewater, is applicable to this investment philosophy in their “All-Weather-Portfolio”.

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The future is unknown and impossible to anticipate. Assets are giving an answer to two motorists: economic cycle (growth/contraction) and inflation (high/low). Asset classes flourish not equally during each of the four scenarios. Risk is distributed similarly over the four scenarios. Stocks for economic development and low inflation. Bonds for financial contraction and low inflation. Commodities for economic enlargement and high inflation.

50,000 as a lump sum in SIP. It is because of the concepts of SIP – rupee-cost averaging mainly, time value of money invested, compounding. This is another common mistake made by many SIP investors. The value of an investment is at the mercy of enough time is remaining spent and not the investment amount. Quite simply, the longer the investment term, the higher would be the investment value. Immature investors tend to be seen placing unrealistic investment goals and repenting later. It is advisable not to expect phenomenal returns from your existing investment.

Instead, you should expect average comes back and continue with your regular investment process. Needless to say, anticipating 50% to 100% returns instead of 10% to 20% is unrealistic. Many traders choose the dividend (drawback from the corpus) option over the growth (no dividends are paid) option when they invest in mutual money through SIP, which runs on the theory of compounding – the interest on the eye. Alternatively, the principle of interest calculation in case there is the dividend is easy interest, gives considerably low earnings. You can anytime switch between the dividend and growth options to increase your corpus and reach your financial goal.

There are times when we go through financially trim and high times. When you are financially high, you have enough money to contribute a lump sum to your SIP accounts. Can a SIP be Customized? Buying SIP is recognized as the most appealing investment. Of keeping your money ideal in a savings bank-account Instead, you can choose SIP and take benefit of regular savings along with earned interest.