Outlook Money 40After40: Follow 4Ds Of Discipline, Duration, Diversification, And Diligence, Says R.K. Jha Of LIC Mutual Fund

Ravi Kumar Jha, managing director and CEO, LIC Mutual Fund, shared invaluable insights into successful investing at Outlook Money’s 40After40 Retirement Expo. He underlined discipline, duration, diversification, and diligence as the four key components of a successful investment strategy.

The Growth Of SIPs

Jha said that systematic investment plans (SIPs) have grown dramatically in India. The SIP pipeline has grown from Rs 4,000 crore in December 2016 to over Rs 26,459 crore by December 2024 at a compounded annualised growth rate (CAGR) of 26.75 per cent. He also pointed out the rise in SIP accounts, noting that there were 130 million SIP accounts in December 2024, a sharp rise from 683,000 in March 2023. This increase in SIP participation is largely driven by millennials and Gen Z, who are increasingly recognising the power of long-term investments and compounding, he said.

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Overcoming Criticism Of SIPs

Jha also mentioned the criticism that SIPs have received despite their increasing popularity.

“With anything that becomes popular, there’s bound to be some envy or backlash,” he said.

He firmly defended SIPs, stating that investors have every right to explore wealth-creation avenues like SIPs, especially since their returns far exceed those of traditional savings. Also, he urged investors to stick with their SIPs during volatile markets by outlining the advantages of rupee cost averaging for long-term investment plans.

Making The Right Investment Choices

On discussions on how one should pick funds from the more than 2,000 available in the market, Jha stressed on the importance of consulting a professional.

He explained, “Financial advisors can help align your investments with your goals.”

He focused on the value of asset allocation as well, comparing it to a well-balanced cricket squad. Just as a cricket team needs batters, bowlers, and all-rounders, so too does a successful portfolio need a balance of equities, debt, and gold, he added.

The 4 Ds: The Key To Long-Term Investment Success

In his final remarks, Jha summarised the core principles for long-term investing success: Discipline, Duration, Diversification, and Diligence. He stressed that long-term growth necessitates consistent investment, regardless of market conditions. He also underlined that diversification lowers risk by spreading assets throughout several asset classes and that a long-term investment strategy is necessary for compounding to fully take effect.

Jha also emphasised on the importance of staying informed and managing investments wisely to maximise returns. He said that by following these four principles, one will be able to take benefit of the magic of compounding and the power of consistent investing in their portfolios.