Stop your MF SIPs and start buying MF units! FAQ Video Series Part 2

Published: July 7, 2018 at 8:45 am

No, this is not a click bait. I am being serious. There are several benefits to stopping your mutual fund SIPs and manually investing. I am working on an ebook – Mutual Fund FAQ: The Basics – that will provide short, easy to understand answers to 100+ common and basic questions that new investors ask. In parallel, I am also making a short video answer to each of the questions covered. This is the second part.

In the first part, we considered

(1) What is an equity mutual fund and a non-equity mutual fund? (2) What is a mutual fund NFO? Should we invest in NFOs?

(3) What is a debt mutual fund?

(4) Can a mutual fund provide regular income?

Do start there if you have not done so: Mutual Fund Basics FAQ: Video Series – part one

In the second part, we discuss the following:

1: Growth Option or Dividend Option? Which Type of Mutual Funds should I choose?

2: Can I get my money back from mutual funds? How?

3: Do Mutual Funds offer any interest?

4: Can I book only profits from mutual funds?

5: How do mutual fund redemptions work when I make multiple investments? FIFO

6: How are mutual funds taxed? (Latest rules – 2018)

7: What is the grandfathering rule for Equity Fund LTCG taxation? (previously published)

8: What is the difference between a mutual fund SIP investment and a lump sum investment?

9: What is a mutual fund dividend?

Notice that many (if not all) of these videos revolve around mutual fund units. Stop thinking about SIPs and lump sums and think about mutual funds as the sale and purchase of units.

Benefits of stopping your mutual fund SIPs & manually buying units

1)  You become more disciplined.

2) You finally understand what a SIP actually is and that it is no different from a lump sum investment.

3) You recognise that you are buying and selling mf units.

4) You understand profit and loss and taxation rules better.

5) You can manage your portfolio better. You control when you invest, where you invest and you recognise that you simply cannot keep investing hoping it will all turn out okay in the end as the sales guys claim. Want an example? Here: Why we need to gradually pull out of equity investments well before we need the money!

Sure, sure the sellers will crib and say behavioural finance this and behavioural finance that. They can all go jump for all I care.

1: Growth Option or Dividend Option? Which Type of Mutual Funds should I choose?

2: Can I get my money back from mutual funds? How?

3: Do Mutual Funds offer any interest?

4: Can I book only profits from mutual funds?

5: How do mutual fund redemptions work when I make multiple investments? What is the FIFO rule?

6: How are mutual funds taxed? (Latest rules – 2018)

7: What is the grandfathering rule for Equity Fund LTCG taxation? (previously published)

8: What is the difference between a mutual fund SIP investment and a lump sum investment?

God that is an awful screengrab!

9: What is a mutual fund dividend?

By the way, I have several videos on the freefincal youtube channel you can subscribe (and click the bell icon) to receive instant notifications.

In case you missed my Index investing options in India seminar, here it is

Have a go0od weekend!

 

Do share if you found this useful
Share your thoughts on this topic at the  Reddit freefincal_user_forum

Reach your financial goals like a pro! Join our 1600+ Facebook Group on Portfolio Management! You can now reduce fear, doubt and uncertainty while investing for your financial goals! Sign up for our lectures on goal-based portfolio management and join our exclusive Facebook Community. The 1st lecture is free!
Want to check if the market is overvalued or undervalued? Use our market valuation tool (will work with any index!) or you buy the new Tactical Buy/Sell timing tool!
About the Author Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management. He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice. He conducts free money management sessions for corporates and associations on the basis of money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association. For speaking engagements write to pattu [at] freefincal [dot] com
About freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. Follow us on Google News Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any kind of paid articles, promotions or PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a young earner

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download)
Free android apps