SIP investment: Why you need to accept losses

are indeed low

To create wealth from stock markets, one should stay invested.

By Dhruv Desai

It is a good practice to remain invested in a falling market or better still, invest more to ensure great returns when market recovers. Majority of the investors would know this but unfortunately, majority of them fail to stick to this advice.

To create wealth from stock markets, one should stay invested. Likes of Warren Buffet, Rakesh Jhunjhunwala didn’t become rich overnight. They have seen all ups and down in the market and had managed to stay invested. In fact, they managed to invest when the market was at the lowest or at least the stock was trading cheap.

Stay invested
When we buy the stock for long term, we feel we will remain invested or invest more when the market falls. But do we actually do it? Let us take an example : Suppose we start systematic investment plan (SIP) of Rs 1,000 every month in HDFC Equity Fund from January 2007. I am taking this year since the market before that was roaring and that would convince many investors to start their investing in the stock market. From January 2007 to January 2008, the returns would be 29.68% where we would have invested Rs 13,000 and we would be getting a return of Rs 16,859. Then in October 2008, the investment would be worth Rs 13,370 from an investment of Rs 22,000. So we would be looking at a loss of 39.22%.

I doubt if any investors would still continue their SIP. I have seen many investors taking a loss and withdrawing from market stating stock market is not meant for them. In fact, if they had continued for another year, i.e., till December 24, 2009, the return would be Rs 53,533 and amount invested would be Rs 36,000 which would give us the return of 48.70%. In fact, if the investor would have continued the same SIP of Rs 1,000 every month, the return currently would be Rs 3,35,060 from an invested amount of Rs 1,43,000. That would give a return of 134% in a span of 10 years.

Investor’s confidence
Falling market tends to shake off investors’ confidence in the market. This is psychology, where fear prevails common sense. When the market is touching new highs, in spite of a warning from the back of our mind that the market is overbought, greed prevails and we find ourselves over committing in the market.

Investors should remove the notion from their mind that equity market will give high returns no matter what. We have seen where in a span of one year, the return was negative 39.22%. It is a volatile asset class and will remain so. Investors need to accept this. Investors who have seen high returns in past are less likely to be swayed by fear compare to investors who have seen low returns in past.

In rising markets, it is easy to say we will remain invested when the market falls but when it really falls, investors tend to crash out and take a loss rather than seeing it as an opportunity to invest more. They feel that the market will fall further and then they will invest. But it is impossible to time the market or catch low. In fact, even if they are getting cheaper stocks, they will wait more in fear that it will fall more.
My aim in this article is to highlight that one needs to accept losses too when doing their SIP. If your tolerance is low in the falling market, teach yourself to overcome your fears when things get bad. Otherwise, you will miss the opportunity of investing when prices indeed are cheap.

[“source=forbes]

Marketing and IT Departments Need to Get In Sync to Best Capitalize on Mobile Technology

IT decision-makers report a much higher importance of mobile apps than their marketing counterparts.
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While the decade between 2007 and 2017 marked the genesis and maturation of the mobile industry, technologies like augmented reality (AR), virtual reality (VR) and artificial intelligence (AI) are poised to accelerate this evolution even faster in the decade to come, according to Adobe—and it found marketers may not be as prepared for the coming changes as their counterparts in IT.

That’s according to Adobe’s latest report, The Next Mobile Decade, which includes a survey of nearly 500 marketing and IT professionals’ priorities and investments in mobile.

Adobe said most respondents have a centralized mobile leadership team, which means mobile strategy is no longer an afterthought. That being said, there’s still potential misalignment between marketers and that must be reconciled if brands want to capitalize on mobile technology and derive maximum benefit for their customers.

Marketers at least seem to view mobile websites as slightly more important than apps: Sixty-nine percent of marketers and 84 percent of IT professionals said apps are extremely or very important, whereas 81 percent of marketers and 83 percent of IT professionals said mobile websites are extremely or very important.

“IT decision-makers report a much higher importance of mobile apps than their marketing counterparts,” Adobe said. “This year we saw a year-over-year decline in the importance of mobile apps and mobile websites for marketers, with more ranking them as ‘very’ important versus ‘extremely.’ This might suggest that marketers are beginning to see mobile as a central component of an integrated strategy and no longer the hot new thing.”

Both groups said they’re somewhat more likely to focus their mobile efforts on apps over the mobile web with the top reason being broader reach and customer preference.

“At least two-thirds of marketers and IT decision-makers report apps being an extension of their web strategy,” Adobe said. “The primary functions and use cases for apps vary, but customer loyalty is still key to both audiences.”

Both IT pros and marketers said roughly one-third of their technology spend goes to apps or mobile sites—and retail companies report the highest overall tech spend for apps and mobile websites, with 42 percent of their budgets going toward apps and 45 percent toward mobile websites.

More than half of marketers said at least a quarter of their digital marketing budget is allocated to mobile acquisition, with an average of 34 percent. Adobe said a balanced approach to
 media—including paid, earned and owned—works best. But, for apps,
 paid media is chosen most often to drive
 customer acquisition, whereas owned media is preferred
 for mobile websites.

Adobe found IT professionals are more likely than marketers to
 measure app engagement and usage over time and said marketers “seem to be missing an important opportunity to learn more about their customers and their marketing efforts.”

Adobe also found IT professionals are more concerned than marketers about leveraging AI and other emerging technologies.

When asked how important leveraging AI will be to improve the mobile experience in the next three years, IT professionals said they are more concerned (53 percent) than marketers (34 percent).

Adobe found a similar split when it came to AR and VR experiences and the Internet of Things (IoT) and also that IT professionals are more likely to have a defined strategy for deployment or limited releases and tests in location-based marketing, IoT, AI, near-field communication (NFC) for content/offer delivery, personal assistants, chatbots, mixed reality, AR and VR.

“What has happened is that marketing—becoming increasingly digital—deals more with analytics and the need for real-time automation,” an Adobe rep said in an email. “The net effect is that marketing now becomes an important stakeholder when it comes to IT tech purchasing. It requires that the two teams work together, to implement and manage the tech stack that every company has. The two teams have to work together to drive having a clear/comprehensive view of the customer and be able to deliver a consistent experience on every touch point.”

[“Source-adweek”]