How SIP is a Better Route for Mutual Fund Investment ?

Written on Saturday, November 19, 2016
By Mitali Sharma

Big_sip_011242.jpg Facebook   Twitter   Google+   LinkedIn   Pinterest

Mutual funds investments have helped many in creating wealth.  Using this financial tool, investors with long term goals have built corpus for their financial aspirations such as retirement, children higher eduction & wedding and others.

However, there are still many, who don't have proper clarity about mutual funds, especially risk averse investors. Such investors can take up the Systematic Investment Plan (SIP) route of MF investment. This blog explains how SIP is a better way of MF investment.

Good Things About SIP

No Need to Time The Market: It is believed by majority that to benefit from mutual funds, one needs to have proper knowledge about market timings, like when to invest and when to withdraw.

This is where SIP stands as the better and convenient route of MF investment. EVERY TIME IS THE GOOD TIME TO INVEST THROUGH SIP. You need not to time the market. Simply, keep investing regularly (preferrably on monthly basis) irrespective of the market high or low.

No Need of Lump-sum Money for Investing: Through SIP you can invest as minimum as RS. 500. There is no need of having a lump-sum amount. Just like a recurring deposit, you need to make a monthly investment of a fixed amount of your choice. You can do that simply by giving post-dated cheque or by opting for auto-debit from your bank account.

You Can start Early: For investing in SIP, you don't need to wait till you accumulate a lump-sum amount. You can start a SIP from your early years of earnings. At the age of 25, if you start an SIP of only Rs 2000/month, you can expect to get approximately Rs 59.3 Lakhs when you will turn 60.

        *  Rs 59.3 Lakhs calculated at 15% rate of return and adjusted against 6% inflation rate.

You Become a Disciplined Investor: The habit of saving doesn't come easy to all. SIP is effective in making you a regular and disciplined investor.

SIP: Three Things You Must Consider

Be Committed to Investing: In SIP, you don't need to time the market but only important factor here is your commitment. You must stick to your investment schedule and shouldn't get bothered by the market rise or fall.

Invest for Longer Period: SIP is benefiting, only if you are investing for at least 3 to 5 years. Longer is your investment period, better will be your returns. The smart way is to link SIP with your long term financial aspirations like retirement, daughter's wedding, children higher education and keep investing for 10 to 15 years.

Select the Right Fund to Invest: Selection of the right fund plan is also important. There are fund plans that are giving 18%to 20% rate of return but only when the investment period is long. There are variety of mutual fund plans to choose form. Taking the advice of a financial advisor, you can learn more about these funds and understand which is the right type of fund to invest.

Get More Info Now!


 Popular Tags

(1) Child Education(2) Child Future Planing(1) Children Future Planing(2) Equity(1) Financial Goal(1) Financial Planing(2) health Insurance(2) Insurance(1) Investment Options(2) Investments(1) Life Insurance (4) MIP(1) Mutual Fund(1) Mutual Funds(5) National Pension System(1) NPS(5) Personal Finance(2) Retirement(1) Retirement Planing(2) SIP(5) Systematic Investment Plan(2) tax calculator(2) Term Insurance(1)Awards(2)Balanced Mutual Funds(4)Bond(2)Bonds(15)Budget 2016-17(4)Budget 2018(2)Child Education(1)Child Insurance(8)Children Education(4)Children Future Planing(3)Children Future Solution(2)Children Future Solutions(2)Claims(7)Corporate NPS(1)Credit Card(2)Debt(6)Debt Funds(2)Early Investing(22)ELSS(4)EPF(2)Equity(9)Financial Assessment(7)Financial Goal(19)Financial Goel(1)Financial Planing(2)Financial Planning(42)Fixed Deposits(3)Fixed Income Funds(1)Fixed Tenure Fund(1)General Insurance(6)GOI Taxable Bonds(2)Gold(1)GST(1)Health Insurance(28)Home Insurance(2)Income Tax(2)Indian Economy(1)insurance(41)Insurance Grievances(5)Interview(2)Investment(5)Investments(82)ITR(7)Life Insurance(21)Life style(20)Mutual Fund(71)Mutual Funds(30)National Pension System(4)NFOs(1)NPS(6)Overseas Insurance(1)Pension Plan(12)Personal Finance(9)PPF(2)Quiz(1)Retirement(28)Retirement Goal(7)Retirement Goel(1)Retirement Planning(5)Save Tax(6)shikha(1)SIP(14)Sovereign Gold Bond Scheme(3)Start Smart(2)SWP(3)Systematic Investment Plan(3)tax free bonds(1)Tax Planning(37)Tax Saving(44)Term Insurance(2)test(1)Travel(1)Travel Insurance(5)ULIP(5)ULIPs(2)Wealth Creation(93)