Does Compound Interest Work on Everything?

Does Compound Interest Work on Everything?

HI SIR, 
I HAD INVESTED 25000 IN RELIANCE POWER SECTOR DIVERSIFIED FUND LAST YEAR FEB. NOW HAVING COME TO KNOW POWER OF COMPOUNDING I AM THINKING OF SWTCHING TO RELIANCE GROWTH FUND AND START MAKING SIP INTO IT . OR SHOULD  ANOTHER OPTION OF GETTING
ASSURED RETURNS IN PPF @8-9% BE MY CHOICE . PLZ GUIDE
READER

It’s fine that, you have invested in Reliance Power Sector Fund. It is India’s one of the largest Fund according to the assets under management. However, Reliance Diversified Power Sector Fund should be considered as a Sector / Thematic Fund.

And I advise anyone to have a core funds in anyone’s portfolio should be Equity Diversified (Vanilla) Mutual Funds. The reason is Simple. Because the sector / thematic funds are bound by their own definitions. Means the fund managers of sector/thematic funds can’t move your money to other sector if something goes wrong with that sector because of the government policies. But the fund manager of Vanilla (Equity Diversified) fund is not bound by any definition. He can any time invest in any sector or move your money from one sector to another sector within a split of seconds only…!!!!

So it is advisable to invest in Equity Diversified Funds as a core funds rather than Sector Funds. Reliance Growth is an Equity Diversified Fund & it’s one of my all time favourite funds. In fact, my own portfolio has this fund. So it’s good if you start SIP in Reliance Growth Fund.

But Well… I don’t understand that why you think that, The Compound Interest won’t work in Reliance Power Fund & in Reliance Growth Only? I think, you have a false belief that, the compound interest works only with SIPs right?……

But well, This is a Myth. It’s not that, the compound interest only works with SIPs only. If you have done lump sum investment in Re Power Fund than also the Compound interest will work over there. The Compound interest works every where.

It is so powerful that, it works on all the Assets in this world such as Stocks, Bonds, Gold, Real Estate, Art, Paintings, Antiques, IPL Cricket Teams, Businesses, Sports Teams, Websites, Blogs, Forums, Internet Businesses, Vintage Cars or any other Assets in this world….!!!!

So right now the compound interest is also working on your money invested with Reliance Power Fund. Right Now Compound interest is also working on the real estate of your Home. It is also working on this Blog. ….!!! Yes, This is True. This Blog is also an Asset because it generates Income for me. So the Compound interest is also working on the valuation of this blog. The Compound interest is also working on Google, Facebook, Yahoo, Amazon, eBay, Reliance, Microsoft, TATA and many more things…..!!!!!

So I think it’s not necessary to transfer your money to Re Growth. Because Re Power is already giving out standing returns to its investors than why to shift money from there? However, Re Growth is a Best Fund so you can start a fresh SIP in this fund.

Forget PPF. Because you are below 30 and without having any independents. So it’s better if you invest all of your money in Equity which has given average 15-20% return in Investments in the long run. Once you cross your 35 and have dependents (Wife & Children), Book some profit from Equity & shift it to PPF. PPF is not for the Growth of Capital….!!!!