How To Turn Your SIP Into A 12% PA Fixed Deposit? (Part-1)

Indraanil Guha

7/21/20241 min read

HOW TO GENERATE AT LEAST 12% PA FROM A 5-YEAR SIP WITH 95%+ PROBABILITY? PART 1 – LIMITATIONS / FLAWS IN CONVENTIONAL SIPs

This video is Part 1 of a new series in which I explore strategies to generate a return of at least 12% per annum from a 5-Year SIP investment with 95%+ probability.

In this video (Part 1 of this series), I explore what has historically been the chances of ending up with at least a low double digit return (11% -12% per annum) at the end of the 5-Year SIP in the NIFTY-50 index. Spoiler Alert: it’s NOT good! In fact, the probability of ending up with a return of 12% per annum or more at the end of a 5-year SIP plan in the NIFTY-50 has historically been almost as bad as the chances of getting a toss of a coin right (i.e. just about 50%)

What are the implications? All this effectively means that if you have a financial goal that is due in 5 years, and you are betting on a SIP over the next 5 years to get you a return of at least 12% per annum and help you achieve this financial goal, then the odds of being able to successfully achieve this goal has historically been just around 50% - once again, that’s same as the probability of getting a toss of a coin right!

However, this series is NOT just about pointing out flaws of a conventional SIP-based investment approach. In Part 2 of this series, I explore the tweaks you can introduce in your 5-year SIP that can potentially help push the probability of ending up with a return of 12% per annum or more at the end of your SIP journey to upwards of 95%! So please stay tuned for the remaining parts of this series!

Do watch the below YouTube video on How To Turn Your SIP Into a FD Yielding 12%+ pa? PART 1 - Limitations/Flaws in Conventional SIPs