Now, you can invest in a Systematic Investment Plan for your shares

After mutual funds, brokerages have introduced SIP for shares. This can be an attractive investment option—Reliance Securities and Geojit BNP Paribas have launched Systematic Investment Plans for equity holdings

Banks offer recurring deposits, and subsequently, mutual funds introduced Systematic Investment Plans (SIPs). Now stock brokers have introduced systematic investment in shares. It is an attractive model of investment, based on the dollar cost averaging (DCA) or constant share purchase model evolved many years ago in the US. Reliance Securities and Geojit BNP Paribas have announced SIP for shares.

The investor has to select a share in the market and invest a fixed sum of money in its purchase every month/quarter—say, Rs5,000. (The number of shares actually bought would be rounded off to the lower limit to avoid fractional shares).

When a share's price is going up, rupee cost averaging would mean buying fewer shares and when the price is down, the reverse will be true. The investor would accumulate a large number of shares over the years. The portfolio value would thus grow along with the market value of the share. This would be useful for saving for the marriage or higher education of a child.

This is more scientific than timing the market on when to buy, or lump sum investment of bank/salary savings—without knowing whether the market is likely to fall. It can act as a good hedge against price volatility as this technique of investment averages the cost of purchase of any chosen stock or basket of stocks over the duration of the SIP.

CJ George, managing director, Geojit BNP Paribas said in a release, "Investors with a regular monthly income can use this route for investing their monthly savings in stocks of their choice or a basket of stocks. Since this is a facility that Geojit BNP Paribas provides on the Internet, it is easy for investors to plan their savings and investments."

Reliance Securities has its own SIP scheme known as 'Regular Stock Purchase Plan' or RSP Plan, which is a disciplined and easy way to invest in the equity market by making small, regular investments. The investments are in a prefixed amount or quantity of shares at defined intervals in scrips of your choice for a fixed tenure. This is a systematic approach to build wealth over the years and the discipline relieves the investor of the risks and pressures of timing the market.

Reliance Securities has an alternative to the SIP/Rupee Cost Averaging option, the quantity-based RSP Plan. This is an RSP Plan type wherein a constant quantity of shares of a desired stock is purchased at each frequency. The quantity would be as specified by the investor and would be fixed, while orders would be placed as per the desired frequency. The order value would be based on the market price of the stock prevailing in the market at the time of order placement. The investor can place an RSP Plan request for a minimum quantity of a single share. This Plan is based on the constant share purchase model (CS-model), which has some popularity in the USA. It is useful for accumulating sizeable number of shares over the years in good scrips.  

With the above options, an investor's portfolio will grow both in quantity of shares held and market price value over time-provided the scrip is chosen carefully and we don't fall into a prolonged bear market.

User

COMMENTS

Ashok

5 years ago

Equity SIP into an ETF would be a great option. You can get the advantage of diversification, the low cost of ETFs and the RCA benefits of SIP. Best of both worlds !!

Mutual Funds

5 years ago

As far as systemic Investment Plan is concerned it is the best way to make your portfolio. But whereas in shares you can buy in every dip and buy more in the next dip with a vision of minimum 5yrs. It is only then your ral investment return is highlighted.

Mutual Funds

5 years ago

I think SIP is the best way to invest in the unpredictable Indian stock market, but Mutual funds are more convenient and risk fee way for it. We should leave it up to the professionals how and when to invest.

Shuvendu Nath

5 years ago

Equity SIP is already active with ICICI Direct. However EQ SIP strategy is working to be a good options for small investors like me. It is prefered to be a rewarding investment option in long term plan. Great facilitation.

Making merry with surrogates

Why is it that the I&B ministry is doing nothing about the many surrogate liquor ads that get aired on prime time television these days?

Surrogate liquor ads have gone through the roof. Once again. I recall some years ago the I&B ministry had come down heavily on surrogate ads, and the liquor kings went into hiding for a while. But as no one's watching anymore, the brands are having a free run with these fake ads. So much so, that they have begun to publicly slam one another, as it recently happened between the makers of Royal Stag and McDowell's.

For the benefit of the teetotalers, this is what happened: Cricketer Harbhajan Singh's mom dashed off a legal notice to Vijay Mallya's UB Spirits, accusing the latter's brand of making fun of her dear puttar. The commercial in question features Mahendra Singh Dhoni, and is for UB's McDowell's No.1. The advert spoofed rival brand Royal Stag's commercial which features Bhajji.



Royal Stag's TVC has Bhajji refusing to work in his dad's boring ball bearings factory, and opts for a cricket ball instead. He 'makes it large' and goes on to become a cricket star. The McDowell's ad copied the commercial and had fun with it. In this one, a Bhajji look-alike hates working in his dad's ball bearings factory. And out of frustration, makes the ball bearings really large, and gets thrashed by papaji. Cut to Dhoni who asks us to forget large, and instead try something different.



Initially, daaru king Mallya refused to withdraw his ad. His tweet suggested that the rival liquor company was behind the brouhaha, and they were firing over Bhajji's mom's shoulder. But he later had a 'change of heart' and pulled the ad; probably realising that the controversy was only drawing attention to the surrogate ads.
 
It is very clear that both the brands benefitted from the media noise that followed. So cheers to them! However, the issue goes beyond the two brands. Why is it that the I&B ministry is doing nothing about the many surrogate liquor ads that get aired on prime time television these days? Under the guise of soda, playing cards and other fraudulent products. Even a fool knows what really is being advertised out here. And these guys had the cheek to publicly fight it out with each other!

I suppose it's the same old desi political story at play here. Loaded, powerful liquor lobbies have ensured that the netas keep shut. And this charade will go on till some busybodies file public interest litigations, and the media picks up the story. And then they will go off the air for a bit. Only to return again. With a bang.
 
Anyway, I am in the midst of enjoying my McDowell's No.1 soda, so I better end this piece. Hic!

User

COMMENTS

R Vijayaraghavan

5 years ago

The I&B ministry, egged-on by some crack-pot haters of Omar Khayyam, got on to the high moral ground and banned liquor ads first and then launched a half-hearted crackdown on surrogate liquor ads. The Govt. knew it had done a foolish thing in banning liquor ads in the first place. Only the totally naive and those with IQs of around 40 can believe that stopping liquor ads will stop people from drinking. People will drink if they want to and people will not drink if they don't want to. Ads have nothing to do with the decision to drink or not. Best is to remove the ban on liquor ads. The only effects of removing ban will be that the ad agencies and the models will get more money and the companies will get more tax deductions. Let us be practical about this, and a hundred other things, and leave the high moral ground to the Anna Hazares and, if the miracle of miracles happens, a new avatar of Mahatma Gandhi, whose moral authority kicked out the British.

REPLY

RNandakumar

In Reply to R Vijayaraghavan 5 years ago

People like Vijayaraghavan who are unable to support even the little help that is coming for the common man from persons like ANNA are arm-chair critics wishing for the imposibility of Gandhi getting re-born. The least help he could do as a public service is atleast not dissuade people who wish to bring some order in public life. Let him not be a confirmed pessimist.

RNandakumar

5 years ago

It would be an interesting statistics to know whether these sodas sell anywhere outside other than the bars. It is like our Indian films where in the name of song and dance pornography is sold. The so called vamps of our films exhibit body movements that would make a cabret artist shy.

Orchid Chemicals Q1 net profit dips 28% to Rs17 crore

“We have entered into long-term contractual agreements with large MNCs,” Orchid Chemicals CMD Raghavendra Rao said

Orchid Chemicals & Pharmaceuticals today said its consolidated profit after tax declined by 28.09% to Rs16.92 for the first quarter ended 30 June 2011, over the same period previous fiscal.

The company had posted a net profit of Rs23.53 crore in the same period previous financial year, Orchid Chemicals said in a filing to the Bombay Stock Exchange (BSE).

The company's total operating income rose to Rs449.23 crore for the April-June quarter 2011, compared to Rs364.57 crore in the same period previous fiscal.

Orchid Chemicals & Pharmaceuticals CMD Raghavendra Rao said: "We have entered into long-term contractual agreements with large MNCs, including Hospira, for supply of our niche APIs and formulations which have augured well."

"Given the less competitive landscape for most of our products, we are confident of a strong growth going forward," Rao added.

On a standalone basis, the company posted a profit after tax of Rs15.54 crore for the quarter, compared to Rs21.61 crore in the same period previous fiscal.

On Friday, Orchid Chemicals ended 7.49% down at Rs206.35 on the Bombay Stock Exchange, while the benchmark Sensex declined .07% to 18,197.20.

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