Kolkata: If the stock market sneezes, many mutual fund investors catch cold. Edelweiss Mutual Fund CEO Radhika Gupta, a veteran fund manager who is always keen to share investment wisdom with the common India, is urging investors to be patient and stay put in SIPs (Systematic Investment Plans) and ignore the noise and fear-mongering over this popular investment mode in mid-cap and small-cap Systematic Investment Plans (SIPs).
In a post from her handle social media platform X, Gupta highlighted the significance of long-term investments. From elaborating on children’s funds to dal-chawal funds, Gupta has regularly tried to enlighten the common investor on how to conduct themselves in the mutual fund space. In the small and mid cap space, the stocks usually suffer bigger volatility than the large cap stocks, which make them riskier investment propositions. This time, Gupta’s words of advice are precisely for the SIP investors in this space.
Common investor to smart investor
Radhika Gupta, who feels passionately about investor education and often takes to the social media for conveying investment wisdom to the common investor has come up with a few bold and pithy sayings for the common investor. “Don’t fall for fear mongering or 10 day debates. Focus on finding a good manager and holding for 10 years, in a sensible balanced way,” is her definitive and bold assertion directed at the common investor.
“The SIP was meant to be a simple savings-investment instrument for the common person. A fill it, shut it, forget it one because most people struggle to markets, market caps and SIPs, she wrote before proceeding to mention four points that she things investors should remember in the raging debate about mid-cap and small-cap SIPs. The points Radhika Gupta mentioned are:
- Everything including mid and small is good in balance. Even an average flexi cap fund has 30% allocation to this category.
- If you look at the returns of anything from the top of the cycle to the bottom (e.g. 2006 to 2013), they will not look pleasant.
- Liquidity is very important and can be managed. We have disclosed liquidity numbers in our funds well before regulators asked and maintain this liquidity, without taking cash calls or holding a lot of large cap.
- The critical thing that no one can disagree about is that the key to making money is to hold on to SIPs for a long time. 10 years. More.
One of the significant points she highlights above is the fact that despite their volatility, the mid and small cap space are extremely significant. She pointed out that about 30% resources of a flexi cap is invested in stocks belonging to this sector.
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SIP, or systematic investment plan has become the most preferred investment mode of a vast segment of middle-class people in India. It is a mode that has been designed to thrive on averaging out lows and highs of markets to the advantage of investors. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
