Magic of Mutual Fund Systematic Investment Plan


Each of us are aware of how we invest. Our daily needs, school fees, etc. These are the most important areas where cash flow is highest. There are long-term goals such as retirement plans or buying a house. It doesn’t matter what your need is, if you plan and save well it will bring you great results. SIP is the best option. This is why a systematic investment plan in mutual fund funds is the best and most simple way to reach these goals.

What’s a SIP?

SIPs are a way to invest in mutual funds. You will need to set aside a certain amount at regular intervals. This money is used for buying units of mutual funds. This works in a similar way to a bank’s regular deposit or a postoffice account. Investors can start as low as 500 dollars to invest each month.

The Advantages of SIP

Systematic investment plans offer many benefits. It all depends on many factors. Let’s look at a few.

Market Timing is irrelevant: Stock market investing involves ups and downs. SIPs can help you get out of depression. Research has shown that mutual funds and stocks outperform all other types of investments. When it comes to investing, SIPs are a great option.

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* It’s not a burden on your pocket: With SIP, you can invest Rs 500 to 1000 each month rather than trying to save several thousand every month. This allows anyone to get on the investment train.

*Compounding Returns: The SIP’s returns become an investment. After a few years, compounding allows the investment to start generating higher and better returns. The best part about long-term investments is their high reward and great return.

Build your future: Many of us require a lot of money to pay for our children’s education, marriage, purchasing a house, and other expenses. It is better to plan ahead than rush. It is best to invest every quarter or month in SIP, and then save the money for big events. This will give you a better chance of making that down payment and getting your child educated well, without having to draw the PF amount.

* Lowers average cost

Systematic investing is more effective than one-time investing. This is due the rupee cost average factor. An investor will buy more mutual fund units when their prices are lower under rupee cost averaging. He will only buy a few mutual funds units if the prices are high. This is a good thing because it allows the investor to commit cash at low market prices, while other investors are exiting.

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* Easy to Start: It is easy to start and stop. It allows you to choose your preferred scheme and withdraw in smaller amounts. This allows you to withdraw money in smaller amounts during an emergency.