SIP – As healthy as doing YOGA regularly

What is SIP?

SIP or Systematic Investment Plan is a plan through which a person can invest a small amount in a mutual fund at regular intervals (monthly/quarterly).

SIP averages your investment cost over the investment duration and gives the flexibility of choosing your own amount and frequency, making it an ideal investment option for any investor.

Mutual Fund SIPs accounts stood at 2.89 CRORE! And the total amount collected through SIP during October 2019 was Rs 8,246 crore

Benefits of SIP

1. Invest small - SIPs can be started with as little as ₹500 each month. You can choose the frequency as monthly or quarterly for investing. Some Mutual Funds also give the facility of Daily SIP.

2. Achieve your goals - Achieve your long-term financial goals as your investments are broken down into smaller, regular investments.

 3. No need to time the market - SIPs offers freedom from being on the constant look out for opportunities to time the market.

4. Discipline yourself financially - SIPs inculcate financial discipline making you invest a fixed amount consistently at regular intervals. By starting early, even with a small amount, you can build a sizeable corpus over a period of time to achieve your financial goals.

 How does a SIP work?

• Every month/quarter a specific amount (decided by the investor at the start of SIP) is deducted from the investor’s bank account and invested in the chosen mutual fund scheme.
• Every time the amount is invested, units of the scheme (as per NAV) are allotted to the investor.
• Since your investment amount gets broken down in equal installments, your investments average out the market ups and downs resulting in averaging your cost.
• Investor can redeem (withdraw) units or switch out to another scheme, anytime he/she wishes to do so. (Please check the scheme related documents as some mutual funds would have a specified lock-in period.)

TIPS

• You can start SIP investments with as little as ₹500 per month.
• The SIP option is available for all kinds of mutual funds (except liquid funds), though it works best for equity investments.
• One has to be careful about ensuring the availability of funds in the bank account, as in case of ECS mandate you cannot pay the missed SIP amount at a later date. Also, penal charges may be levied by the bank.

Please visit our website to plan your investments

http://lakshmishree.com/market-sip.php