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Systematic Investment Plan (SIP) has become one of the most popular ways to invest in the equity market, especially to beat inflation in the long run. SIP allows an investor to invest a small and fixed amount in a mutual fund scheme. Through SIP, an investor can invest money at regular intervals such as monthly or quarterly.
Investors’ financial goals are generally divided into long-term and short-term goals. While international vacations, vacations, or buying luxuries come under short-term goals, buying your own home, planning for retirement funds, and children’s education come under long-term goals. Enrolling for Mutual Fund SIP is the easiest way to benefit from the effect of compounding of money over a longer time horizon to meet all your short term and long term goals.
Following are the major benefits of investing in Mutual Fund SIPs:
Regular Investment:
SIP allows you to invest money in various mutual funds at regular time intervals such as monthly, quarterly or annually.
Maintaining discipline in your asset allocation:
Regular investment creates a good investment discipline, which will help you to a great extent in achieving your financial goals at the end of your investment time frame.
power of compounding
SIP helps to a great extent in terms of compounding the value of the money you invest regularly. In simple words, through the power of compounding, they help you convert a small portion of money invested over a long period of time into a large corpus at the end of the investment horizon.
SIP allows investment in small amounts
One of the most striking features of SIPs is that they allow you to invest in mutual funds for an amount as small as Rs. 500 or Rs. 1000 per month.
The best way to start a SIP is to approach a financial professional. They will not only provide you with the best SIP options but will also help you align your SIP investments with your financial goals through a good diversification strategy.
Basket List:
1. Offensive Basket: For people with high risk appetite. The stocks in this basket are from the front-line companies that make up the major index.
2. Mid-Cap Basket (Very Aggressive): For those with maximum risk appetite. Stocks in this basket show high upside as well as downside potential.
3. Medium Basket: For people with moderate risk appetite. Stocks in this basket are companies that have moderate upside as well as downside.
4. Defensive Basket: For those with a low risk appetite. Stocks in this basket belong to companies in defensive sectors and have shown limited upside as well as downside.
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