STP-systematic transfer plan in MF investing

Good Morning Readers , 
I have already talked about SIP - Systematic investment plan, where Funds from investor's bank account gets deducted each month or week or bi weekly or quarterly as per the instructions given for investment into a mutual fund scheme on a pre specified date and amount , Here STP is Systematic Transfer plan , where Firstly investors park their lumpsum investment amount let say 100000/- INR in a Liquid or Liquid plus mutual fund scheme where the Safety of the capital , liquidity and returns are well managed and then an amount from liquid / plus funds gets transferred to the mutual fund schemes mostly an equity scheme and that transfer could be daily , weekly , monthly on a pre specified date and amount , STP are very good investment strategy to gain advantage of volatility and rupee cost averaging , When markets are highly volatile due to some national and international economical factors , STP is a very disciplined and one of the good approach to enter in the market , Generally it is advisable to run the STP for at least 1-3 years of investment horizon where systematically transferred investment amounts get invested in different market levels and post investing amount periodically , remaining amount in liquid / plus schemes has no impact of volatility hence it protects the total portfolio stability also , A large sum of investment must be invested through STP strategy to protect the capital and gain from volatility.

Thanks
Praveen Kumar Verma 
Your Financial Freedom Coach  

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