Most of us are relieved with financial year coming to a close and we managed to complete the 1 lac tax investments. Many of my clients made the investments in the month of January .Why January you ask?
Well that was the month when the company wanted the investment proof. Wrong timing one might say. ; When you ask them why you didn’t invest earlier they say we are waiting from August markets never corrected. There are some who have the capacity to invest now but they say markets might dip further this may not be the right time to invest.
So when does one invest who can help time the market?
Well the answer is a simple one. No one can time the market .One of the best ways to beat the market is through SIP [Systematic Investment Plan].It’s based on a simple rupee averaging principle. When the price is high you get less number of units when the price is low you get more number of units.
Why ELSS ?
1. Generates highest returns as compared to other Investing avenues
2. Provides a lock in period of Three years which is the minimum for any tax saving avenue.
3. ELSS can also be seen as a way to long term investing in equity markets.
4. With India growth story unfolding and fundamentals looking intact, Presha Investments is of the opinion that equities would continue to outperform other investing avenues for at least next 5 years in spite of the recent downfall. Investing in ELSS provides dual benefit of capitalizing on superior returns as well as tax saving.
Why risk does ELSS pose to an Investor?
The basic risk with ELSS scheme is that since it has a considerable equity exposure, the returns are linked to market returns and hence there is no guarantee of returns and even capital.
However, we feel that this is more of a precautionary statement and needs to be reviewed in broader sense.If we choose an ELSS schemes which has delivered excellent performance in past years and has a track record of consistent results, the chance of investors losing out would be negligible..
Click Here for a presentation on ELSS
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