People used to invest monthly in traditional intrumentrs but Systematic Investment Plan (SIP) is a known investment vehicle now a days (thanks to AMFI “Mutual Fund Sahi Hai” Initiative). SIPs too work on the simple principle of investing regularly which enable you to build wealth over the long-term. In case of SIPs, on a specified date which can be on a daily basis, monthly basis, or on a quarterly basis, a fixed amount as desired by you, is debited from your bank account (either through a ECS mandate or through post-dated cheques forwarded) and invested in the scheme as selected by you for a specified tenure (months, years). SIP is works on the principal of Power of Compounding. The appoach of decipline investment regularly, one can create huge wealth.
There are different types of mutual funds for SIP. One should select the funds based one the time horizon and risk taking capacity. Many investor only knows the SIP in equity mutual funds only but consevative investors or time horizon upto 3 years, one should also look debt mutua funds for their SIP. We suggest our clients to start SIP in ultra short term funds for your annual committed payments like insurance premiusm, child school fees, EMIs, etc.
There some besnifits of SIP are as follows:
1) You can start with small amount of Rs. 500/p.m:
Many investor thinks that they should need more money to start investment thorugh SIP. But fact is one can start SIP with minimum amount of Rs. 500/p.m. In some mutual funds minimum amount is Rs. 1000 per month which will directly debited from registered bank account.
2) SIP- The Power of Compunding :
The regular investment for long term for long term helps to create wealth. So, one start investment though SIP of Rs. 1000 per month for 20 years with exprected returns of 15 years. One can ger approxmately of Rs. 15 lakh. This is called power of compounding in the long term.
3) SIP – Best tool for Goal Planning:
Everyone have life stages goals and for that need money. Goal Based SIP is the best tool to achieve different goals. For that one should be stay invested for the goal period.
Our Mutual Fund Advisory help you to start your mutual fund investment with best suitable funds for your needs and based on your risk tolerance. Kindly contact on +9198257771 or email@example.com