SIP

In Mutual Fund one option is to invest a lump sum . The other option is to invest regularly through a Systematic Investment Plan (SIP), a scheme where you can periodically invest a fixed sum, which could be as low as Rs. 500/- per month. Considered as one of the ideal low-risk methods of wealth accumulation, SIP helps investors over come the fluctuations of equity investment. Some consistently performing mutual fund companies include HDFC, Franklin India, Reliance Mutual Fund, Birla Advantage, UTI balanced, Kotak, ICICI and Morgan Stanley.

Investing through SIP makes timing and cycles of the share market totally irrelevant. With SIP, you invest a fixed amount regularly. Therefore, you end up buying more units when the markets are down (when the NAV is low) and less units when the markets are up (when the NAV is high). This is called rupee-cost averaging. SIP works as a disciplined investment method as it forces you to buy even when the markets are low, which is actually the best time to buy.

MONTH 1: Rs.1000/- NAV:Rs.10/- UNITS:100
MONTH 2: Rs.1000/- NAV:Rs.9/- UNITS:111.11
MONTH3: Rs.1000/- NAV: Rs.10/- UNITS:100
MONTH 4: Rs.1000/- NAV: Rs.11/- UNITS:90.9

Total investment: Rs.4000/-
Number of units purchased: 402.01
Therefore average cost per unit: Rs.9.95

Is mutual fund better?!

Mutual Funds

Mutual funds are the ideal place to invest small amounts of money because you can buy a mutual fund without direct trading costs. For example, if you put Rs.1,000/- in to a stock each month for a year, you will end up paying at least Rs.135/- in commissions to a broker. So out of Rs.12,000/- invested, only Rs.10,380/- goes to work for you-an automatic loss of 13 percent. But when you invest Rs.1,000/- a month directly with a fund, the entire Rs.12,000/- goes to work!!

Mutual funds are safer than you think. Mutual fund prices are driven by the price changes of the securities it holds- the fund is only as risky as the type you choose. Banks and insurance companies can go bankrupt but, by definition, mutual fund companies cannot. Once you understand inflation, average returns of different types of investments and compound interest, you may ralise you are taking a bigger risk by tying your money up with low-producing products like savings accounts.

A dedicated team of professionals is better than a single individual picking stocks.

The beauty of a mutual fund is that you don't need to be an expert on the thousands of stocks that it buys. Diversification (investing in various types of stocks) helps keep your returns up and risk down.

Investing in mutual funds is not hard. It can be as simple as filling out an application and mailing it in with a cheque. However, knowledge is power and if you desire to understand mutual funds and make smart investing decisions, call an agent now.

This content is taken from some books.

About EPS, PE ratio

Earnings Per Share is calculated by dividing a company's net revenues by the outstanding shares. This gives you a number you can use to compare the earnings of companies since it is unlikely any two companies will have the same number of shares outstanding.

The P/E looks at the relationship between the stock price and the company’s earnings. The P/E is the most popular metric of stock analysis, although it is far from the only one you should consider.
You calculate the P/E by taking the share price and dividing it by the company’s
P/E = Stock Price / EPS
For example, a company with a share price of $40 and an EPS of 8 would have a P/E of 5 ($40 / 8 = 5).
What does P/E tell you? The P/E gives you an idea of what the market is willing to pay for the company’s earnings. The higher the P/E the more the market is willing to pay for the company’s earnings. Some investors read a high P/E as an overpriced stock and that may be the case, however it can also indicate the market has high hopes for this stock’s future and has bid up the price.

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GROWING MONEY!

Well!!
You have earn money from other sources. But you thinking that money must give profit to you without your work. Thatmeans your money shall work and gives you profit. How?

Permenent income sources are :
1. Deposit in some banks.
2. Deposited in post office like RD account something.
3. Bonds.

But the above mentioned investment shall give returns small quantity with secure manner. If you like to take risk you shall invest in:
1. Equity shares
2. Mutual Funds
3. IPO
4. Unit liked Insurance Policy

The above mentioned investment shall give good returns in long term. But it shall gives you small return also.

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