Invest in SIPs for long term wealth creation: Expert

Systematic Investment Planning (SIP), being the simplest way of investing, Hemant Rustagi, CEO, Wiseinvest Advisors is of the opinion that you need to keep it going on a continuous basis in order to make your money count in the long run.

Rustagi advises that with a time-frame of around 15 years, you can place your bet on diversified equity funds. Below is an edited transcript of his interview with CNBC-TV18. Also watch the accompanying video. Q: An investor can invest Rs 2,000 per month. How should she allocate the money? She has a time horizon of 15-20 years and a goal of Rs 20-25 lakh. Is Rs, 2,000 per month sufficient for her? A: If the time horizon is around 15 years or so, she can get around Rs 10-12 lakh. It would be very difficult to maybe reach to that level with an investment of Rs 2,000. I think she needs to invest more money than what she wants to invest right now. The right thing would be to begin the process now with whatever money she has. As the time goes by, if she is in a position to invest more money, she should add to that. Since she is investing for the first time, the time horizon is around 15 years, she can also look at equity funds. She can also look at well diversified equity fund, maybe a pure large cap fund and also at equity oriented balance fund. So she can consider two funds - HDFC Prudence Fund, which is a balanced fund, and DSP Blackrock Top 100. This fund invests only in the top 100 companies in terms of market cap; these are generally the blue chip companies. So she can invest Rs 1,000 each in these two funds. The key factor, of course, will be to continue the process. As I mentioned earlier, as and when possible, try and increase the amount to achieve the target in mind.