How to manage your own SIP?

Updated: Thursday, August 29, 2013, 18:21 [IST]

So far, if your mutual fund Systematic Investment Plan (SIP) has proved to be disastrous and the fund's NAV has gone nowhere in the last few years, then you must start investing directly in the stock markets yourself, if you have the knowledge.

You can systameticaly set aside a sum to be invested each month in a basket of stocks or select stocks that could offer you value over a period of time. This could be done with adequate research and a little professional advise.

For example, you may want to take a look at some of the beaten down names in some beaten down sectors. Take a look at some of the private sector banks, which offer tremendous value. By buying stocks each month you are likely to hedge your risks and also average stocks in case the markets fall.

However, as indicated in the beginning, you should certainly have knowledge of the stock markets, including a reasonable good technical and very good fundamental understanding.

It's important to evaluate your stock on the basis of future growth potential of a company and the usual ratio like the EPS, P/E ratio, price to book value and dividend yield.

In any case, many financial portals provide you ready data on the above, provided you know how to interpret them.

What's important as indicated is that you must invest each month and over a period of time you would have realised that your portfolio has grown.

Of course, if your not comfortable doing the same, you can always look at a Mutual Fund SIP or stick your fund, if it has not given returns over a period of time.

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