Nov 29, 2013

Equity Systematic Investment Plan ( ESIP ) - Intelligent way of stock accumulation

Systematic Investment Plan ( SIP ) remained very popular and successful method of investment in Mutual Funds for long term investors.Taking inspiration from SIP, the leading stock brokers have started providing similar option to investors for stock accumulation.This is known as Equity Systematic Plan ( ESIP ) or Systematic Equity Plan ( SEP ).
Equity Systematic Investment Plan ( ESIP )

We all know it is always risky to invest in stock market.An investor willing to buy stocks wants to enter in the stock at a fair price so as to minimize his risk and maximize the returns
.So he keeps on waiting for optimum levels on the market to enter.The fact is that you can never time the market perfectly.So you may or may not get your desired levels to buy the stock.Sometime markets just run away and you just keep on having grudge that you missed the bus.On the other side,you get your desired levels and buy the stock but the market keeps on sliding,throwing the shivers through the body.

ESIP or SEPs help to remove these hindrances in the path of investment of an Investor.This plan works similar to the SIP except that in ESIP you keep on buying your chosen stock in a predefined quantity or amount on a predefined time interval instead of buying units in SIP.

By opting for ESIP,you remove the need to time the market.You keep on buying a stock irrespective of price fluctuations and over  a time period,you see that your buying price gets averaged.So sharp market movements don't impact you and your portfolio much.Moreover,you start taking market exposure without waiting for market correction.Just allocate the capital you want to invest,choose a good stock with strong fundamentals and select the quantity and time interval and start investing regularly.

So consult  your stock broker for ESIP and build a portfolio of blue chip stocks in a systematic way to reap the rewards of market moves over the longer period of time.

2 comments:

  1. Thank you for sharing such a good informative post. private markets

    ReplyDelete
  2. The post is very knowledgeable. Thank you.

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