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Long-term systematic investment with ABJ Finstocks or SIP with Mutual Funds? 

What should you opt for?

Everyone keen on growing their wealth comes across the term called ‘systematic investment’. And the moment one hears the word SIP, investing in Mutual Funds comes as a natural option. Sure, SIP and Mutual Funds are branded together, but you have to think about systematic investments beyond just mutual funds. 

Systematically investing for long-term gains from the stock market, through an organisation like ABJ Finstocks, is an option you should opt for. But before that, you should know a few things. The first question that will come to your mind is, “Systematic Investment in the Stock Market”? How is that possible? The stock market is a risky proposition, what if I lose all my money?” 

The truth of the matter is, Mutual Funds are also risky, it is just not sold that way. So first, let’s clear some concepts and also some misconceptions.

What are Mutual Funds and how do they make money for you?

A mutual fund is a type of investment vehicle that pools money from many investors and uses that money to buy a diversified portfolio of stocks, bonds, or other securities. Mutual funds provide diversification, professional management, and liquidity. They come in various types, such as equity funds, bond funds, hybrid funds, etc. So just think if the Mutual Funds company is investing in the risky stock market, won’t there be any risk involved?

When it comes to Mutual fund investments, investors are unaware of the specific stocks or bonds held in the fund on a daily basis. The level of transparency provided to the investor is through periodic updates on the fund’s performance, holdings, and other relevant information real-time details about the portfolio are not provided.

Did you know as an investor in a mutual fund you share the gains as well as losses of the fund’s holdings? The value of the mutual fund, known as its net asset value (NAV), is calculated daily based on the closing prices of the securities in the fund’s portfolio.

Long-term systematic investment with ABJ Finstocks Makes you Own the stocks and not Units.

Now let’s understand what we do at ABJ Finstocks that is Best Stock Advisor in India. Unlike in Mutual funds, where the level of transparency is restricted to statements, factsheets, and annual reports, here you invest yourself in your account our recommended stocks and all things are crystal clear. 

When you invest in stocks recommended by ABJ Finstocks you have stocks in your own account:

1.  You know the stocks you invested in, the price you invested in, and the actual returns made from your investments.


2. You are aware of the returns bifurcation from dividends you earn and wealth made. This means you are aware of the proportion of the fund’s total returns that come specifically from dividend income. This is important for you as an investor because you understand the sources of returns within the fund and evaluate the role of dividend income in contributing to overall performance.

3. You even have the choice to opt for the rights options in the stocks you have invested in. This is not directly available in the case of Mutual funds. Since you have the actual quantity of shares in your own account (unlike units in Mutual Funds) you also get the benefit of Bonus and the Split quantity of shares keeps rising. This increases the proportion of dividends gradually. 

All this is possible only when you hold the shares in your own account and not through Mutual funds units. 

2.  Expenses on investment. How much will you earn from your investment, depends on your expenses also.

Sure, investment in Mutual Funds takes away the pain of monitoring the stock market daily. But the price you pay for it is huge. Take a look at this example. 

Suppose you invest Rs. 1 lakh as SIP in Mutual Funds every month for 20 years. How much will you earn and how much will be expenses that the Mutual Funds company will deduct from you? Remember the expenses they deduct are their earning from your investment. This example illustrates the earning at 17% CAGR at 2% expense. So when you invest Rs.1 lakh p.m. the amount invested in a year will be Rs.1200000.

Study the table carefully and you will realise the amount of money you end up paying to the Mutual Fund companies.

So the total expense at the rate of 2% for 17% CAGR after 20 years is equal to Rs. 23,56,087.631. And the total earning at the rate of 17% CAGR after 20 years without paying the expense to the Mutual Fund company is equal to Rs. 13,50,74,503.864.

What do you understand from this exercise? Are you still keen on investing in Mutual Funds? 

Make an intelligent choice. 

To know more about how ABJ Finstocks can help your wealth multiply, get in touch with us. We are a SEBI-registered Research Analyst since 2016 and we follow all the guidelines specified by SEBI.

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