Few inquestive minds were enquiring what makes VIP score over other conventional method of investing. They were keen to know the exact logic that makes this VIP win:
In the below mentioned table, you would find that:
(1) As you keep investing in SIP, your average price falls to Rs.78.33, only to raise later to Rs.96.95. (See Chart). This is because SIP is more like a Recurring deposit, wherein you invest money in a disciplined way. Techinically you should have not invested beyond 1-Mar-2009 when the NAV was the lowest @ Rs.51.22.
(2) VIP precisely addresses this problem. By adopting VIP investment strategy, you stop investing after 1-Mar-2009. VIP strategy aims and captures the lowest possible NAV and keeps the average cost of investment low all the time. The graph below would clearly state it. After hitting rock bottom, VIP's average purchase cost remains constant till the end.
(3) As a result, the average price of SIP was 96.95 and VIP was 74.44. That itself is a clear 30.24% outperformance. Imagine an investor exited at break even in an SIP, (sold off his units at Rs.96.95), a similar sale in an VIP based investment would have fetched readymade 30.24%.
(4) This 30% outperformance acts as a levarage for VIP. For instance if the NAV increases to Rs.100, then SIP deliveres a return of 3.15% where as a VIP deliveres 33.78%.
(5) If NAV increases to Rs.140, then SIP against its average price of Rs.96.95 deliveres an absolute return of 44.40% against a VIP returns of 87.29%. That is a clear 42.89% outperformance against initial difference of 30.24%.
(6) This outperformance continues to rise as the NAV keeps rising, all due to the low average cost of purchase of VIP. That helps in maximizing the profit.
Hence it makes more sense to invest by the VIP strategy. Every investor should try this VIP strategy to appreciate the benefits of VIP. After all to appreciate the sweet taste of an apple, you need to taste it first.
Do stay in touch with us to make your VIP Investments right away. We will be happy to help you plan your VIP investments either by Online mode or Offline mode. Call us @ 4393337, 6544488, 9944193339.
Wonderful Concept.
ReplyDeleteFor the first time I am hearing something so dynamic.
Keep it up
- Venkat
Can you provide a link to the older article on VIP. I have a few questions but would like to read the earlier article before jumping with the questions.
ReplyDeleteThanks,
Ram
Thanks for sharing the ideas. Its very helpful. I have read some new ides to invest in Real Estate from a blog post. I am sharing the link below http://www.sichermove.com/blog/index.php/real-estate/wise-investment-in-kerala/ .
ReplyDeleteThanks for sharing such an informative blog. It's very helpful for near future. Thank you. Jindal Bullion
ReplyDeleteCan you recommend an investment advisory service provider for investment in equity.Do you also provide such services.
ReplyDeleteRegards