why not stp ?

I am not an avid tracker of all these indices like sensex or Nifty . I have some of my friends who burnt their fingers not knowing what they were doing in the markets. Some of them were told by their mutual fund agents during the 2007-08 that indian exhanges can give you returns of 200 p.a ..What ?

Come on, lets be honest . For any stock to deliver 200 % yoy , the production needs to jump 200% . Agreed indian markets are huge and they have a lot of value .But expecting a ROI of 200% every year is just next to impossible . Investing in Indian equity would give you returns of abt 20-30% over a longer tenure , which is really good .

Taking their advices and tips , my friends investments have eroded big time .I for one never believed in stuff which generates short time happiness . I prefer long term . After some analysis, I did come to know that most Mutual fund AMCs have a product called STP .
Yeah Systematic Transfer plan . Whats so great abt it ? This is very much similar to SIP ( Systematic investment plan ) . But with a minor difference .
Here , you move the money periodically frm debt funds ( check my old article on this ) to equity funds instead of having bulk deposits . This way you if you are in the top tax bracket you save on tax on Savings account as well as you get the fruits of investment in equity . The only catch here is you might not have AMCs which are strong both in debt and equity . And you can have a STP only within a AMC ad not across AMCs.
All AMCs should have these products. You might want to try this product and let me know your feedback .

Madhu
-the financial expert .