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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