STP most effective tool for good returns in volatile market for mutual fund investors.
Let’s understand about STP. How Mutual Fund Systematic Transfer Plan help invest in volatile markets. In volatile markets, investors often face the dilemma of whether to invest or to wait for the prices to fall further. While investing at market bottoms undoubtedly yields higher returns it is almost impossible to time the market. The year-to-date Sensex chart below will show the challenges in trying to time the market. You can see that Sensex made multiple bottoms from which it rebounded only to correct again later. Such market conditions are often confusing for average retail investors. What are Systematic Transfer Plans? Mutual Fund STP essentially is a mechanism to transfer funds systematically from one mutual fund scheme to another. You can use STP to invest your lump sums in equity mutual funds in a systematic manner in volatile market conditions, by investing a low-risk debt mutual fund scheme like a liquid fund and transferring fixed amounts at regular intervals (wee