We’ve got FOMO if we think there are parts of the money world that we don’t know about! We realized that GMTA, and thought you might experience this fear too! TBH, there is a lot of ground to cover, and the journey to financial literacy is perennial. But, being the GOAT means never giving up. You see what we’re trying to do here right? Oh well! IYKYK.
Today, we’re rounding up some of the most common abbreviations associated with investing, to help further your financial education! Let’s dive right into it –
Whether you’re a newbie investor or an investing vet, these 5 terms will keep cropping up in your investment journey. Understanding these terms will bring you a step closer to financial literacy – so keep them in mind!
And that brings us to the last 3 abbreviations we’ve got for you. Investing in mutual funds requires systematic planning. Luckily for investors today, there are already systematic plans in place, each with its own outcome and objective, to help you invest regularly while also making big gains. Let’s look at this as a comparative table –
Systematic Investment Plan
Systematic Transfer Plan
Systematic Withdrawal Plan
SIPs allow you to invest in installments of small amounts, rather than investing a huge lump sum in one go. SIPs leverage the rules of rupee cost averaging and compounding interest to provide investors with the most lucrative earnings possible.
STPs are a popular investment strategy that allow you to manage your funds by transferring money from one mutual fund scheme to another. This transfer of funds takes place periodically, to reallocate your funds to a scheme that offers higher returns.
SWP is an investment scheme where you can arrange for a periodic withdrawal from your SIPs. The amount you want to withdraw, the frequency at which you want to withdraw, and when you want to withdraw – is entirely up to you.
These three systematic plans for mutual fund investing can help you create a winning strategy for wealth creation! These are tried and tested ways of ensuring that you simply have no excuse to not invest! They promote consistency in your investments, which is the key to unlocking the full potential of your financial portfolio.
Mutual fund investing, all by itself, can be lucrative for making gains.
But, mutual fund investing, together with the right information and knowledge, is a tool for wealth creation.
Bonus PS –
A Millennial Glossary
(Not a glossary of millennial terms, but rather a glossary of terms we’ve used in the intro which millennial readers might struggle with!
FOMO – Fear Of Missing Out
GMTA – Great Minds Think Alike
TBH – To Be Honest
GOAT – Greatest Of All Time
IYKYK – If You Know You Know
The AMFI is a non-profit organization that plays the role of a regulatory authority for all mutual fund investing in the country. It was incorporated in August 1995, and operates under SEBI guidelines.
SIPs allow you to invest in installments of small amounts, rather than investing a huge lump sum in one go. SWPs, on the other hand, arrange for a periodic withdrawal from your SIPs.
The NAV of a mutual fund represents the price of one unit, on a particular day.
Yes. You should consider the AUM of any AMC while deciding whether or not you want to invest through it. A higher AUM indicates a larger market value of all the funds that an AMC is handling.
An NFO is a first-time subscription that offers a mutual fund scheme to the public (investors). Launched at a fixed price (usually of ₹10), an NFO is usually up for grabs for a limited time period of 15 days.