SIP in equity stocks gaining traction

A Systematic Investment Plan (SIP) is a trusted way to build wealth

Hyderabad: Many of the retail investors putting their money in the equity market lose because they invest in poor quality stocks or withdraw their investments too quickly. Not many of them have a handholding while investing and portfolio management services are out of bounds for them due to the small size of their investments, according to Paras Matalia, Head, StockBasket, Samco Securities.

A Systematic Investment Plan (SIP) is a trusted way to build wealth. “Adopting the SIP principle, we have created stock baskets for the investors to invest in. The focus is on individual companies and not on the sector. We have created 28 baskets to suit investment needs of the retail investors. We avoid companies that have a high level of debt,” said Matalia. At StockBasket, one can invest in readymade portfolios of stocks created by research analysts begnning Rs 3,000.

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Investors are allotted the stock basket units for the corresponding value. They will have to open a demat account with Samco Securities. The investments can be tied to a goal- children’s education, retirement, vacation or home.

“SIP in equity stocks or SIP in expert created portfolios of stocks, has been in existence since the last 2-3 years. People have begun to understand their significance now,” he said adding that StockBasket allows investors to invest in monthly, quarterly, bi-annually or annually. Between March and July, the average size of investment increased by 300%.

“Many get into equity markets and buy junk stocks. They are lured by the huge movement. Since the value is low, the investors put in huge amounts. Likewise, when they fall, they will sometimes fall up to 90 per cent or more, thereby severely denting the value and leave little scope for investors to make any returns,” he explained why many lose money and never return to market

“Diversification of the portfolio is good but having 150-200 companies will not help much. So, we include fewer companies,” he said adding that the stock baskets take the guess work on the part of investors out.

“We will refund the subscription fee if the investment value falls even after staying invested in our stock baskets for the agreed period,” he said.

Even as the markets saw deep fluctuations due to Covid, equity markets world over have seen a lot of retail investors pouring in money into the stock markets. About 3% of StockBasket’s unique customers and about 4.5 per cent investments are from Hyderabad, he said.

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