Advantages of SIP
Discipline Investor
With Systematic investments, one is bound to have a habit of investing, albeit in a small amount, and when they see the yearly returns, they start making progress for a better future perspective. This makes them regular investors, which gives them financial security in their upcoming time.
This method of SIP is quite easy, convenient, and adaptable, offering a wide range of choices for investors to bring their money to the market. Also, make your monthly installment done near the day of the salary so that other expenses are more manageable in the specified duration.
No Market Dependency
There are usual market misconceptions that one should not invest in the markets while they are high as the benefits will be low, but with a Systematic Investment Plan, you will get complete rupee cost averaging, allowing for better management of investment itself.
When the prices are high, NAV units bought will be low, while as the prices get lowered, more units will be purchased, thus averaging the rupee cost value in the market entirely. Hence the timing of the market should not affect your SIP funding in any way, and start them early as possible to get more benefits later in life.
Short term targets and Long term Goals
Every individual must have some short-term targets and long-term goals to achieve in their life. Once they are set, you must focus on achieving those with the right methods for investments.
There might be regular expenses, yearly expenses that need to be separated from regular investment so that you can lead a more balanced life. Car Loans, Annual fees, Home maintenance, Shopping, etc., are regular investments of specific targets only while Child education funds, marriage funds, Retirement funds, home loans are long-term investments that must be given enough time to reap more benefits from these funds comprehensively.
Customized
Many mutual fund companies provide a variety of customizing choices, such as investing frequency (fortnightly, monthly, quarterly, etc.). This allows the investor to align their income stream with his investment.
Additionally, an investor can increase his SIP by a specific percentage each year (or at a certain period). This enables an increase in investment to correspond to an increase in the investor’s income. Perpetual SIPs are another possibility. There really is no final date in this. As a result, once the financial target has been met, the investor can discontinue the SIP.
Large Wealth Creation
These SIP investments open your gates for large wealth creation step by step with the ease of small amount investment. Compounding interests are the way for large wealth creation; the more time you allow in the investment to mature, the more you will reap the takeover’s maturity completely.
Hence one must focus on starting their SIP as early as possible, even with smaller amounts that can be further increased later to give added benefits brought on by the power of compounding. Each year, this amount increases with hefty margins, so a delay of 5-10 years can have a large difference at the time of the final amount entirely.
Conclusion
SIPs are preferable in the long run since they balance out the stock market’s good days and bad days, protect you from making bad decisions driven by emotion and provide superior prospective returns. As a prudent investor, you should take advantage of the benefits of SIPs as a way to invest gradually and attain your investing goals.
How can Wealthcare India help you?
At Wealthcare India, we offer expert suggestions. (being a mutual fund distributor, we cannot use words like advisor and planner for ourselver, nor the related wordsfinancial advice for investing in various funds in the market with their approach, the time span of investment, maturity benefits, and tackling the market highs & lows on the basis of past, current, and future perspective based on the individual financial status.
Our experts can guide you in making smart choices for selecting the right funds as per choice as well as requirements to meet life goals and targets in life. These modern ways of investing with SIP have proven to be a lot of success in the current time, attracting a lot of investors in the market.
