Samriddhi Smart Lagani Scheme (The Systematic Investment Plan in Equity)

Albert Einstein once said that the most powerful force in the universe is the principle of
compounding. In investments, this manifests itself through compound interest. You might have
heard of the saying, Little drops of water fills the empty ocean. This the main purpose of Equity
Systematic Investment Plan.

Selection of stocks and decision of the right price and time to enter the market is an integral part
of equity investment and this is the step where most of the investors falter. Equity SIP is an
instrument which helps you avoid the risk of timing the markets and facilitate wealth creation in a
disciplined manner by averaging cost of Investments.

The aim of Smart Lagani Scheme of Samriddhi Capital Limited is to provide a handsome amount
of return to the investors by adopting a disciplined way of investing fixed amounts on a regular
basis for a longer period say 5-10 years. This helps in averaging out the rupee cost of investing in
a stock market portfolio.

Following are the ways through which Samriddhi Capital Ltd. can make their product/scheme
Samriddhi Smart Lagani more attractive to the investors:

- Prepare a thorough questionnaire to find out the risk aversion level of the clients. The client
risk aversion level determines how much risk they want to take as well as their return. This
helps the company to create a suitable portfolio for the client depending upon their risk and
return level.
- In the initial phase of the entering into contract with the clients, the company can provide a list
of stocks, which it believes are very good for long term investments. The clients can provide
their preference in selecting the stocks. This will provide a sense of ownership in the portfolio
to the clients and increase their satisfaction level. However, since this is a discretionary
portfolio, the preference of client may or may not be incorporated. The final choice of selecting
and creating the portfolio is based on the fund managers.
- Once the product is launched and it becomes successful among the investors, the company can
look to target the middle income group investors. This can be done by reducing the amount of
initial investment from Rs. 5 lakhs to Rs. 3 lakhs and also reducing the minimum regularly
payment from Rs. 5000 to Rs.3000. This will help in attracting more and more clients.
- In Nepal, the investors does not have mush idea about what Systematic Investment Plan (SIP)
nor does the Portfolio management service providers. Introducing Equity SIP in Nepalese
capital market can be very advantageous for Samriddhi Capital. The company has a first mover
advantage in this regard. But the main concern here is awareness of institutional and individual
investors regarding the Equity SIP. The company needs to give this much importance as the
success of the scheme/product depends entirely on the investors acceptability in the market.
The company must conduct various workshops/seminars for the investors so that it is easier
for them to understand the concept. Also, personal counselling and convincing is needed to
persuade the clients to invest in the scheme/product at the early stage.

Sample Risk Aversion Questionnaire

Circle the letter that corresponds to your answer

1. Just 60 days after you put money into an investment, its price falls 20%. Assuming none
of the fundamentals have changed, what would you do?
a. Sell to avoid further worry and try something else
b. Do nothing and wait for the investment to come back
c. Buy more. It was a good investment before; now its a cheap investment, too.

2. Now look at the previous question another way. Your investment fell 20%, but it is part of
a portfolio being used to meet investment goals with three different time horizons.

2 A. What would you do if the goal were five years away?

a. Sell
b. Do nothing
c. Buy more

2 B. What would you do if the goal were 15 years away?

a. Sell
b. Do nothing
 c. Buy more

2 C. What would you do if the goal were 30 years away?

a. Sell
b. Do nothing
c. Buy more

3. The price of your retirement investment jumps 25% a month after you buy it. Again, the
fundamentals havent changed. After you finish gloating, what do you do?
a. Sell it and lock in your gains
b. Stay put and hope for more gain
c. Buy more; it could go higher

4. Youre investing for retirement, which is 15 years away. Which would you rather do?
a. Invest in a risk-free money-market instrument guaranteed investment contract.
b. Invest in a 50-50 mix of fixed deposits in banks and stock market, in hopes of getting
some growth, but also giving yourself some protection in the form of steady income.
c. Invest in aggressive growth mutual funds whose value will probably fluctuate
significantly during the year, but have the potential for impressive gains over five or
10 years.

5. You just won a big prize! But which one? Its up to you.
a. Rs. 2,000 in cash
b. A 50% chance to win Rs.5,000
c. A 20% chance to win Rs.15,000

6. A good investment opportunity just came along. But you have to borrow money to get in.
Would you take out a loan?
a. Definitely not
b. Perhaps
c. Yes
7. Your company is selling stock to its employees. In three years, management plans to take
the company public. Until then, you wont be able to sell your shares and you will get no
dividends. But your investment could multiply as much as 10 times when the company
goes public. How much money would you invest?
a. None
b. Two months salary
c. Four months salary

Scoring Your Risk Tolerance

To score the quiz, add up the number of answers you gave in each category ac, then multiply
as shown to find your score.

I. (a) Answers 1 = points

II. (b) Answers 2 = points
III. (c) Answers 3 = points

YOUR SCORE points

If you scored . . . You may be a:
914 points Conservative investor
1521 points Moderate investor
2227 points Aggressive investor