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MAiP - Market Adjusted Investment Plan

What is MAiP?- MAiP is a strategy to invest in mutual funds. It is a way to invest strategically / smartly in mutual funds. What are the existing ways of investing in mutual funds? – Generally, there are two ways to invest in mutual funds

Lumpsum.
Systematic Investment Plan (SIP)

How MAiP is different form SIP and lumpsum?

As discussed above SIP and Lumpsum are the ways to invest in mutual funds, whereas MAiP is the strategy to smartly manage the funds invested in mutual funds via SIP and lumpsum route.

This is the first ever strategy developed by IJH Wealth for managing investments in mutual funds.

Why do we need MAiP strategy?

Investors mostly invest in mutual funds for long term investments and therefore, don’t think of exiting / booking profits until need arises. But does this policy of not exiting helps us maximize our returns in long term?

Before, we conclude our answer to the above question, lets discuss more.

Here, when we talk about Mutual fund investments, we are talking about investing in equity markets. Our returns are based on the performance of market. So, naturally the performance of our portfolio will depend upon the performance of the market.

To analyse further lets’, see how market operates?
Given below is the weekly chart of Nifty from Dec 2008 Jan 2024.

The chart clearly shows that overtime market is generating positive returns. So, it is definitely worth investing in equity based mutual funds.

As discussed above, markets are generating positive returns in the long run, but does that mean markets are moving upside in linear fashion? No, as is clearly visible from the chart, market doesn’t only go up it also goes down. It moves in a zig-zag pattern. Sometimes market goes up and sometimes down creating waves in the market. These waves give rise to volatility in the market. Investors usually fear this volatility.

Is there any way we can benefit from this volatility? Is there any hidden opportunity?

Yes, we can. And the answer is MAiP strategy. Under MAiP strategy we make use of this volatility to enhance our returns and beat market returns overtime.

How MAiP strategy works?

MAiP strategy works on the principle of value divergence. It is an automated financial model which derives 3 types of values from the market –

 

Real Value ‘RV’

The real/actual value generated by an asset class based on its fundamentals and financial principles. This also includes the important aspect of the time value. Here, RV works as the underlying for IV and DV.

Inflated Value ‘IV’

 This value is derived from RV, any value generated over, and above RV is considered as IV. IV generated by markets are discounted by either time corrections or price corrections. So, this should be considered as notional value in the hands of investors, and it might get eroded with time.

Deflated Value ‘DV’

This value is also derived from RV and is opposite of IV. Anything available in the market at discounted prices i.e. below its RV is DV. Anything available in the market at DV is a short-term opportunity available for an investor to be utilized. This parameter helps us in increasing our returns in over time.

Let’s understand in detail from the graph:

As we can see on chart market moves away from average growth line creating upside and downside momentum. These momentums give rise to inflated and deflated value in the market shifting away from real value.

What process do we follow in MAiP strategy?

MAiP strategy calculates these 3 values in real-time and helps an investor in a complex decision-making process of entry and exit. So, when market generates inflated values, MAiP strategy guides in booking inflated profits before they get eroded by the market. Similarly, when market provides deflated values, MAiP suggests buying at lower valuations. Thus, investor ends up selling more at higher prices/IV and buying at lower prices/DV which helps in increasing their returns over time.

4 complex questions solved by the MAiP strategy:​

When to buy?

How much to Buy?

When to sell?

How much to sell?

Step by step process for strategic investment - MAiP

– Understanding the needs and goals of investor
– Creating risk-profile for the investor
– Building the most suitable portfolio based on investment principles.
– Implementing MAiP strategy on the portfolio.
– Timely entry and exit as guided by the strategy.
– Periodic review
– Achievement of goals.

Results of MAiP

The back tested results of our strategy, MAiP, demonstrate a remarkable outperformance in comparison to the market benchmark. Over the past decade, MAiP has consistently surpassed the Sensex, showcasing an impressive average Compound Annual Growth Rate (CAGR) return of 19.47%, significantly outpacing the market’s 12.45% CAGR.

These returns have been calculated for the period
( January 2014 - July 2023 )

Power of MAiP

The presented results definitely reveal that investing the same capital in the same instrument over an identical time frame, but strategically employing the MAiP strategy, can result in a substantial upgrowth in portfolio value over the long run. Notably, over a 30-year period, the observed difference in portfolio value exceeds 100%, highlighting the impactful outcomes achievable through a strategic investment approach like MAiP.

Incorporating MAIP into your mutual fund investment strategy is like having a trusted financial advisor by your side - ensuring that your investments are strategically timed and poised for superior returns in the long run.

About Company

IJH Wealth, a leading Wealth Management brand owned by IJH Academy Private Limited, is registered with AMFI as a Corporate mutual fund distributor and with SEBI as a stock sub-broker. Guided by the principles of Discipline, Direction, Decision, and Dare, we leverage our robust digital presence to provide a wide range of comprehensive services, including equity broking, mutual funds, and other financial instruments. Committed to financial literacy, we empower individuals with knowledge-based investing.

Contact details

Email Support@ijhacademy.com

Phone 7974060910, 9584460674

 

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