Goal Based SIP Calculator

What is a SIP?

Systematic Investment Plan or SIP is the most disciplined style of investment in which a fixed amount is invested at regular intervals (yearly, quarterly, monthly). SIP makes use of a revolutionary concept known as Dollar Cost Averaging.

Dollar-Cost Averaging

Dollar-Cost Averaging is an investment strategy in which an investor divides up the total amount to be invested across periodic purchases of a target asset in an effort to reduce the impact of volatility on the overall purchase. The purchases occur regardless of the asset's price and at regular intervals.

In effect, this strategy removes much of the detialed work of attempting to time the market in order to make purchases of equities at the best prices.

The Power of SIP

This is a story where even a mutual fund scheme which has performed poorly for over 12 years has made decent returns for its SIP investors.

JM Core 11 Fund was launched on 5^th March 2008 at an NFO price of Rs 10/unit. As of 4^th February 2020, the NAV of this scheme is Rs 9.67 which is below it's NFO price. So anybody who invested in this scheme during NFO is still sitting on negative returns even after around 12 years.

Instead of investing a lumpsum amount in the scheme, let's assume that you decided to go the SIP route with Rs 5,000 per month since inception till date, with the total amount invested being Rs 7,15,000 (Rs 5000 x 143 months), your investment will be worth Rs 14,09,725 today which translates into a CAGR of 10.45% approx.

That is the real Power of SIP and Dollar-Cost Averaging.

This is strictly for educational purposes and should be interpreted as such.