MisterBond's Smart Investing cum Exit Strategy from SIP Calculator
MisterBond's Smart Investing Strategy - Alternative to Lump Sum Investments in Equity Schemes
This strategy is alternative to Lump Sum investments in Equity Mutual Fund schemes and not alternative to Dynamic Asset Allocation Schemes (DAAF or BAF or Dynamic Equity schemes). This will ensure movement from pure Equity schemes at expensive valuations (Red Zone when MisterBondâ€™s Algo will read 1654 or higher to DAAF and from DAAF to pure Equity schemes at cheaper valuations (Green Zone when MisterBondâ€™s Algo will read 1154 or lower). This will ensure investing and disinvesting at right valuations in right asset classes and make investment journey more effective and less volatile for Investors. Main purpose of the strategy is to protect in built profits; move to less aggressive asset class (DAAF) at expensive valuations and vice versa.
MisterBond's Exit Strategy from SIP Calculator
Mutual Fund Industry is giving â€œMantras like SIP Karo Bhool Jaoâ€. Is this correct strategy? Value of SIP of Rs.10,000 p.m. from 2005 to 2007 (Rs.3.60 lacs became Rs.7.50 lacs). We asked Investors to continue their SIPs. We did not try and protect already in-built profits from downside. Rs.5.10 lacs SIP from 2005 to 2009 came crashing down to Rs.3.80 lacs when Sensex crashed by almost 60% in 2008-2009 and that is when Investors stopped their SIPs. Exit strategy from SIP of MisterBond will help to protect down side. In October 2007; at extreme expensive valuation (Red Zone defined by Algo of MisterBond); SIP portfolio of Rs.7.50 lacs in value (Investment value of Rs.3.60 lacs) would have been switched to Dynamic Asset Allocation Fund (DAAF, BAF, Dynamic) of the same AMC. Even after switching this SIP portfolio to DAAF, SIPs will continue. Now you will have two folios: 1) DAAF which was switched from SIPs and 2) future SIPs in Equity. At cheap valuation zone (Green Zone as defined by MisterBond); DAAF portfolio will move back to pure Equity scheme where SIP is happening. This then becomes a combo of Exit Strategy from SIP + Smart Investing.