Example:-
If you are buying 10g Gold from year 2000 to year 2017 on particular fix date in each year.
We have total 17
years. Here below 2 cases are explained.
Case I:- Mr. A is
buying 10gram gold every year.
Case II:- Mr. B is buying with fixed price which is Avg purchased cost of gold 17 years of Mr. A for each 10g.
Case II:- Mr. B is buying with fixed price which is Avg purchased cost of gold 17 years of Mr. A for each 10g.
Data is on real gold
price.
So, You can see difference. In same amount of investments there is difference in returns by 3lk. Both invested 2.75lk. But the way who choose of "Systematic way of investment" is important.
The same principle is working behind SIP in mutual fund,
As our SIP amount per month is fixed. When market is high we are getting less
units compare to when market is low.
Which is called Rupee Cost Averaging or Compounding Effect.
Which is called Rupee Cost Averaging or Compounding Effect.
By Amol Bonde
+91-8983237732
Visit www.growwithmf.com
+91-8983237732
Visit www.growwithmf.com
