Arvind Kumar Sahu @ArvindSahu_1 - Twitter Profile

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over 3 years ago

Feeling Happy & Blessed 😊🙏🎉 CA Arvind Kumar Sahu. Thank You @BhanwarBorana @CARajKumar1 @SSEI_Education @caparveensharma #ICAI #caresult

ArvindSahu_1's tweet photo. Feeling Happy & Blessed 😊🙏🎉

CA Arvind Kumar Sahu.

Thank You @BhanwarBorana
@CARajKumar1
@SSEI_Education
@caparveensharma

#ICAI #caresult https://t.co/Qhz0YKmgMY

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ArvindSahu_1 retweeted

Advait Arora

@WealthEnrich

8 days ago

If you think a ₹50,000 monthly SIP is enough to take a ₹50 lakh portfolio to ₹5 crore, you have to realize that after a point, that ₹50,000 starts looking very small compared with the size of the portfolio. SIPs are excellent when you are building your first ₹20 lakh, ₹30 lakh or ₹50 lakh. But once the portfolio becomes large, your monthly savings become small compared with what the portfolio itself does every day. 🟦 1. Just look at the numbers. On a ₹5 lakh portfolio, ₹50,000 is 10% fresh money. On ₹1 crore, the same ₹50,000 is only 0.5%. A normal 1.5% move in your ₹1 crore portfolio is ₹1.5 lakh... equal to three months of SIP. At this stage, asset allocation and what you buy start mattering far more than the SIP date. 🟦 2. Then comes idle cash. If you have ₹15 lakh sitting in a savings account and still invest only ₹50,000 every month, the bigger question is not whether your SIP is disciplined. The question is... what is the rest of the money doing? 🟦 3. Markets also don't know it is the 5th of the month. A SIP will buy whether the market is cheap, expensive or somewhere in between. Nothing wrong with this for most investors. But with a larger portfolio, I would also want money available when good businesses suddenly become cheaper. 🟦 4. This is where tranche buying starts making more sense. Suppose a company you have tracked for years falls 15% after one weak quarter, while the long term story remains fine. I would rather have the ability to put ₹3 lakh or ₹5 lakh there than wait for twelve monthly instalments. 🟦 5. Big falls matter much more once the portfolio gets bigger. A ₹50,000 SIP during a 20% market correction is still ₹50,000. But deploying a few months of accumulated cash during such periods can make a much bigger difference to future returns. Of course... only if you know what you are buying. 🟦 6. And this is where SIPs in individual stocks can become dangerous. Averaging an index is one thing. Automatically buying more of a company whose business itself is deteriorating is something completely different. Sometimes averaging down is investing. Sometimes it is simply refusing to admit you were wrong. 🟦 7. Valuation also starts mattering more. I would not stop investing simply because the market looks expensive. Timing the market perfectly is impossible. But I also would not force every rupee into equities at any price just because a SIP mandate says so. 🟦 8. Then there is the mutual fund collection problem. ₹10,000 here, ₹10,000 there... and after a few years you have 10 or 12 funds owning many of the same stocks. Pl understand more SIPs does not automatically mean more diversification. 🟦 9. Once a portfolio becomes ₹1 crore, ₹2 crore or ₹5 crore, the game changes. Your salary and monthly savings still matter... but the portfolio itself is now doing most of the heavy lifting. At this stage, where you keep cash, when you deploy it, what you avoid and how much you put into your best opportunities starts mattering much more than simply increasing one more monthly SIP. SIPs definitely helps you to build the much needed solid base. But after a point, capital allocation actually starts deciding the result !

WealthEnrich's tweet photo. If you think a ₹50,000 monthly SIP is enough to take a ₹50 lakh portfolio to ₹5 crore, you have to realize that after a point, that ₹50,000 starts looking very small compared with the size of the portfolio.
SIPs are excellent when you are building your first ₹20 lakh, ₹30 lakh or ₹50 lakh. But once the portfolio becomes large, your monthly savings become small compared with what the portfolio itself does every day.

🟦 1. Just look at the numbers.
On a ₹5 lakh portfolio, ₹50,000 is 10% fresh money.
On ₹1 crore, the same ₹50,000 is only 0.5%.
A normal 1.5% move in your ₹1 crore portfolio is ₹1.5 lakh... equal to three months of SIP.
At this stage, asset allocation and what you buy start mattering far more than the SIP date.

🟦 2. Then comes idle cash.
If you have ₹15 lakh sitting in a savings account and still invest only ₹50,000 every month, the bigger question is not whether your SIP is disciplined.
The question is... what is the rest of the money doing?

🟦 3. Markets also don't know it is the 5th of the month.
A SIP will buy whether the market is cheap, expensive or somewhere in between. Nothing wrong with this for most investors.
But with a larger portfolio, I would also want money available when good businesses suddenly become cheaper.

🟦 4. This is where tranche buying starts making more sense.
Suppose a company you have tracked for years falls 15% after one weak quarter, while the long term story remains fine.
I would rather have the ability to put ₹3 lakh or ₹5 lakh there than wait for twelve monthly instalments.

🟦 5. Big falls matter much more once the portfolio gets bigger.
A ₹50,000 SIP during a 20% market correction is still ₹50,000.
But deploying a few months of accumulated cash during such periods can make a much bigger difference to future returns.
Of course... only if you know what you are buying.

🟦 6. And this is where SIPs in individual stocks can become dangerous.
Averaging an index is one thing.
Automatically buying more of a company whose business itself is deteriorating is something completely different.
Sometimes averaging down is investing.
Sometimes it is simply refusing to admit you were wrong.

🟦 7. Valuation also starts mattering more.
I would not stop investing simply because the market looks expensive. Timing the market perfectly is impossible.
But I also would not force every rupee into equities at any price just because a SIP mandate says so.

🟦 8. Then there is the mutual fund collection problem.
₹10,000 here, ₹10,000 there... and after a few years you have 10 or 12 funds owning many of the same stocks. Pl understand more SIPs does not automatically mean more diversification.

🟦 9. Once a portfolio becomes ₹1 crore, ₹2 crore or ₹5 crore, the game changes.
Your salary and monthly savings still matter... but the portfolio itself is now doing most of the heavy lifting.
At this stage, where you keep cash, when you deploy it, what you avoid and how much you put into your best opportunities starts mattering much more than simply increasing one more monthly SIP.

SIPs definitely helps you to build the much needed solid base. But after a point, capital allocation actually starts deciding the result !

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