1.This formula of mutual fund profit booking is very simple but very powerful method to book profit in a SIP of the mutual fund.
You may apply it on any funds history.
2. I think you like this superb method of profit booking because this formula invented by me from 5 to 6 year hard research work on NAV history of mutual funds.
3.In this formula when your total portfolio value grows 11% then book profit in your 33% mutual fund units and continue your SIP.
4.For example, you start SIP of 500 rupees in a mutual fund at NAV of 10.
After 15 months of your SIP suppose your total unit is 733 total investment 15*500=7500.
Now NAV is 11.36, so current value of your portfolio is 11.36*733= 8326.88
so your net profit is 8326.88-7500=826.88
It is above 11% of your investment so now book your 1/3 (33%) holding.
It means if you own 733 unit then you sell 733/3=244.33 unit it will give you the total amount of 244.33*11.36=2775.58.
In this INR 2775.58, you book all of your profit 826.88 and remain 2775.58-826.88=1948.70 is the principal investment which you book,
So your remain investment in SIP is 7500-1948.70=5551.30.
Now continue your sip add per month 500 in principle amount and wait next 11 % rise in total investment.
5. Read Part 2 of this article, where I provide Excel sheets of practical examples with using this method here is the link of next part:-
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10 comments:
Maheshji,
Its nice to see the two new blogs of your's and your growing dominance in financial sector.
Now the query on your formula:
At the moment your formula doesn't tell me about why only 11% & 33%. It can be any other number as well. What is the exact benifit of using this percentage only doesn't come out of your illustration.
Secondly, a moajority of people invest in mutual funds (mainly service sector) for tax benifits. In such case, the funds purchased will be ELSS Mutual Funds. It would be really appreciable to analyse them with priority.
Pj
PJ sir
thanks for your comments, i try many percentage as a research and find best resulet when i use 11 % and 33%, for detail illustration i think i write a further article on this blog, formula still requiare correction so i invite other user comments on this formula with illustration,
sure, i write next article on ELSS
What are the benefits of booking profits this way and not keep unita for longer period like 10 to 15 years
Hello sir,
plz give more illustration for detail.
Thanking you.
Thank you A P sir
When I have time I try to update this article with new illustration
Regards
mahesh sir your blog is exllent.
Thank you sir
now your remain investment in SIP is 7500-1948.70=5551.30 now continue your sip add per month 500 in principle amount and wait next 11 % rise in total investment.
above sentenses not to undarstand Sir
plz give Calculation for investment.
Please wait some days when I free I try to upload a excel sheet for bettar understanding,Regards
sir,
If I got returns of above 11% in 6 months, then can exit 33% units OR wait for 1 year.
please advice.
thanks
deepak
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