While investing in these plans, investore are confident that they will get the highest return from the market ober a long run. However, there are many catches in these plans.
CONFUSION
How are the investors get confused in these plans. the confusion lies in the title itself. It is the highest NAV and not the highest 'Return'. hence, even if market grows by 200%, it is not necessary that NAv also rises by 200%, since 100% of the money is not in equaties. a part of it is also invested in bonds and resik free debts which move almost independent to equity market.
BE OPTIMISTIC
Let us not be so finicky about these plans. After all, you and me are just small fishes in the pond and these plans are designed by very experienced and seniour people with excellentknowledge of finance. (with due respect to them, as I really respect them and their knowledge).
So, what is good about these plans? Suppose market rises for some time and then falls. We all can say that they will invest the money in equity market at the time of rising and will invest and bonds and risk free investments tools at the time of falling market. Isn't it easy! But really, is it that easy?? are you and me always aware that is it the rising time for the Sun or setting time for the Sun. If we are so sure, then we must have made thousands of percent of profit in last 3 years of highly fluctuating market. But has we really made that much profit?? i don't think we have. I don't have made such hughe profits (not even small profits for that matter). so, how we know when to invest in equity and when to invest in risk free tools. here comes the role of our bosses, the designers of these schemes who are giving us the gurantee of highest NAV.
INVESTOR'S PERSPECTIVE
What we discussed till now is how the investment companies run these plans. OK, agreed, we have so much knowledge that we consider our knowledge at par with these investment houses who invest crores of ruppes. This level of knowledge(which actually we don't possess) gives us the right to comment on these plans even on public portals and blog sites(like I am doing now, as if I the best investor, ofcourse, I am NOT)
Still, let us be little humble and think from investors point of view. What we want is highest return (here, highest NAV). So, let us not do much calculation, (which we will do later on), and just imagine as a lay man.
Today, market is in the range of 16000 - 17500. what we assume that where can the market go maximum in next 10 years. I agree, it is next to impossible to guess, still, as I said, we are lay man. Let us assume, 25,000. No, we are lucky people, and market will cross 30,000. Still no? Ok. Let us assume that market will be doubles some time in next 10 years and will reach 35,000. So market is doubled now :) Shall, we assume that NAV will also double. OK. In this case, we get the double the amount of what we invested. so, what is the big deal?? That we can make by investing in any zero risk investment scheme.
I DON'T UNDERSTAND ALL THIS. I WILL SIMPLY INVEST
Ok. let us forget all these calculations and simply invest. These schemes are offered by many organizations like SBI life, ICICI, LIC, Reliance etc.
Here is the comparision of SBI Life, LIC and ICICI Pru.
Note: Click on the image to enlarge it
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