Benefit With Systematic Investment Plan Advantage

Systematic investment Plan advantage can be taken by any investor who can spare at least 500 rupees per month. Some funds offer SIP Plans with an investment as low as 100 rupees. But for most of the funds minimum investment per month is 500 rupees. Most people have misconception that to invest large sums of money is required. But starting with an amount as low as 500 rupees per month can accumulate huge wealth in long term. It is a fact that people have many dreams or goals like better education for children, foreign vacation, dream home or happy retirement. But with limited income most people do not understand how to reach those goals.Systematic investment Plan advantages are not limited only to low amount of investment. We know that it is almost impossible to time the market highs and lows. Most people lose money investing in shares due to timing the market rather than being a long term investor. Even the best of the investors or traders often miss market direction. For a layman or investor with little time and resources to research market moves, Systematic investment Plan advantage is unparalleled. With rupee cost averaging one can invest regularly in equities without worrying about timing the markets highs and lows. In long term, rupee cost averaging helps to accumulate wealth which is an advantage of Systematic investment Planning.Usually investors keep averaging same number of shares/unit whenever there is a decline in the price and never while the price is rising. In the long bull run this may be an opportunity loss as no further investments are made. Rupee cost average through SIP works irrespective of market highs and lows. When the market keeps decreasing, more number of units are accumulated and less number of units are accumulated when market is increasing.To take Systematic investment Planning advantage you must keep invested for long term. Historically it is seen that SIP works best when invested for long term. Earlier, advisers used to suggest 3 to 4 years as long term. But after 2008 market collapse, investors could not recover their losses even after investing for almost 5 more years. It is better to consider long term as a full market cycle rather than in years.SIP investing allows investors to be balanced in their investment decisions. Disciplined and Balanced investment is another advantage of Systematic investment Plan. Investors with long term goal oriented investments often do not take investment decisions in haste and avoid panic selling or greedy buying. It is noticed many times that investors who associate their investments with goals are more balanced in their decisions.One can choose different intervals like daily, weekly, monthly or quarterly averaging while investing through SIP which is another Systematic investment Plan advantage. Investors have the option to choose fixed dates on which their accounts are debited for the fixed amount they wish to invest. If the day chosen happens to holiday, amount gets debited on next working day.Another Systematic investment Plan advantage is the flexibility in payment options like ECS (Electronic Clearance Scheme), Auto debit and post dated cheques. Out of the options, ECS is most convenient option for most of the investors.For small investors who wish to invest less than 50000 per year in a mutual fund, PAN card is not mandatory. KYC can be completed with submitting voter identity card or driving license.

SPDN: An Inexpensive Way To Profit When The S&P 500 Falls

SPDN is not the largest or oldest way to short the S&P 500, but it’s a solid choice.
This ETF uses a variety of financial instruments to target a return opposite that of the S&P 500 Index.
SPDN’s 0.49% Expense Ratio is nearly half that of the larger, longer-tenured -1x Inverse S&P 500 ETF.
Details aside, the potential continuation of the equity bear market makes single-inverse ETFs an investment segment investor should be familiar with.
We rate SPDN a Strong Buy because we believe the risks of a continued bear market greatly outweigh the possibility of a quick return to a bull market.
Put a gear stick into R position, (Reverse).

By Rob Isbitts

The S&P 500 is in a bear market, and we don’t see a quick-fix. Many investors assume the only way to navigate a potentially long-term bear market is to hide in cash, day-trade or “just hang in there” while the bear takes their retirement nest egg.

The Direxion Daily S&P 500® Bear 1X ETF (NYSEARCA:SPDN) is one of a class of single-inverse ETFs that allow investors to profit from down moves in the stock market.

SPDN is an unleveraged, liquid, low-cost way to either try to hedge an equity portfolio, profit from a decline in the S&P 500, or both. We rate it a Strong Buy, given our concern about the intermediate-term outlook for the global equity market.

SPDN keeps it simple. If the S&P 500 goes up by X%, it should go down by X%. The opposite is also expected.

Proprietary ETF Grades
Offense/Defense: Defense

Segment: Inverse Equity

Sub-Segment: Inverse S&P 500

Correlation (vs. S&P 500): Very High (inverse)

Expected Volatility (vs. S&P 500): Similar (but opposite)

Holding Analysis
SPDN does not rely on shorting individual stocks in the S&P 500. Instead, the managers typically use a combination of futures, swaps and other derivative instruments to create a portfolio that consistently aims to deliver the opposite of what the S&P 500 does.

SPDN is a fairly “no-frills” way to do what many investors probably wished they could do during the first 9 months of 2022 and in past bear markets: find something that goes up when the “market” goes down. After all, bonds are not the answer they used to be, commodities like gold have, shall we say, lost their luster. And moving to cash creates the issue of making two correct timing decisions, when to get in and when to get out. SPDN and its single-inverse ETF brethren offer a liquid tool to use in a variety of ways, depending on what a particular investor wants to achieve.

The weakness of any inverse ETF is that it does the opposite of what the market does, when the market goes up. So, even in bear markets when the broader market trend is down, sharp bear market rallies (or any rallies for that matter) in the S&P 500 will cause SPDN to drop as much as the market goes up.

While inverse ETFs have a reputation in some circles as nothing more than day-trading vehicles, our own experience with them is, pardon the pun, exactly the opposite! We encourage investors to try to better-understand single inverse ETFs like SPDN. While traders tend to gravitate to leveraged inverse ETFs (which actually are day-trading tools), we believe that in an extended bear market, SPDN and its ilk could be a game-saver for many portfolios.

SPDN and most other single inverse ETFs are vulnerable to a sustained rise in the price of the index it aims to deliver the inverse of. But that threat of loss in a rising market means that when an investor considers SPDN, they should also have a game plan for how and when they will deploy this unique portfolio weapon.

Proprietary Technical Ratings
Short-Term Rating (next 3 months): Strong Buy

Long-Term Rating (next 12 months): Buy

ETF Quality Opinion
SPDN does what it aims to do, and has done so for over 6 years now. For a while, it was largely-ignored, given the existence of a similar ETF that has been around much longer. But the more tenured SPDN has become, the more attractive it looks as an alternative.

ETF Investment Opinion

SPDN is rated Strong Buy because the S&P 500 continues to look as vulnerable to further decline. And, while the market bottomed in mid-June, rallied, then waffled since that time, our proprietary macro market indicators all point to much greater risk of a major decline from this level than a fast return to bull market glory. Thus, SPDN is at best a way to exploit and attack the bear, and at worst a hedge on an otherwise equity-laden portfolio.

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