Market Volatility Makes Sense

Market Volatility Makes Sense

SIPs reduce the risk of investing highs,  do remember the fundamental advantage and need for a SIP, which is that it makes you invest, automates that investment, and keeps you building wealth over the years., it is only in equity funds/hybrid aggressive funds that you can turn market volatility to your advantage, by investing on dips and lowering costs, in the absence of that volatility, you get on averaging benefit, in such funds,  do remember the fundamental advantage and need for a SIP, which is that it makes you invest, automates that investment and keeps you building wealth over the years.

For some the focus is the blue line - fall in NAV, for me - it’s the green line - More no of units ..

Generally, most of us focus on falling or rising NAV movements only. But when there is a rise in NAV, if you invest, you will get less number of units, when there is a fall in NAV, you will get more number  of units.

For example, the NAV is 10 rupees and you have invested 1000 rupees, you have got 100 units, after a few days NAV has fallen down to 8 rupees, and now if you invest the same 1000 rupees at 8 rupees NAV, you will get 125 units. The difference is 25 units.

This difference in units makes a lot of difference in the long run. So, when you are focusing on NAV movement, the movement also focuses on units as well.

Raja Bhattacharjee

 Email:  investment.junctions@gmail.com

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This blog is purely for educational purposes and not to be treated as personal advice. Mutual fund investments are subject to market risks, read all scheme-related documents carefully.