Understanding the Fundamental of Systematic Investment plan

Understanding the Fundamental of Systematic Investment plan


There was the time when investing in stock markets was taken as risk and most often or not Indians preferred fixed deposits as a viable method for investing in longer times. With modernization and younger people accepting the facts that using lower risks are part of the market investments and the best way to manage them is via Systematic Investment Plans >(SIP). These are part of the mutual fund’s investment only but in more broad and sophisticated way that allows lowering of risks as well as ease of investment at the investor threshold rather than on single company investment earlier used.

Fundamentals of S.I.P.

These are a more sophisticated way of investing in mutual funds with specified regular amount respectively. This amount can be weekly, monthly or quarterly as per the customer instructions. These systematic investments will be debited from your personal account automatically. This amount is then used to buy a specific number of units i.e. Net Asset Value or NAV on the running market values in your name and this cycle goes on repeating every month by adding new units respectively. This allows for rupee cost averaging and provide the platform to generate large wealth generation for your future consideration.

Rupee-Cost Averaging with SIP

Markets tend to be volatile in their fundamental nature so the prices of stocks might go lower or higher as unpredictable. So there is no definite perfect time to invest in the market as there will always be up and down on daily basis. With SIP allows more flexible methodology with ease of investment every month. More NAV units are bought when the prices are lower for that month and fewer units when the prices are higher hence it averages out to be the best value for your SIP investment.

Benefits of Systematic Investments

One of the largest advantages you can gain from these timely SIPS is the disciplined investments.  These regular SIP’s can be accordingly to the investor which allows the flexible way for long-term saving plans. One thing that most market professionals will guide you that SIP return is better when you the duration is more than 10-15 years as the compounding interest offer huge profits once managed appropriately. As SIP is easily linkable to your bank account with recurring debits from an account, this mode offers the right convenience for those who have little time in their busy working schedule. There are few mutual funds scheme that offers tax benefits under the Equity-linked saving schemes but these are locked for minimum three years as per the stipulated regulation set by the Indian tax department. After which the investment can be broken but short-term gains are few and not recommended in SIP.

At Wealthcare, we are the team of highly skilled professionals offering right guidance that allows for better planning into future wealth generation. Our communication lines are open 24×7 and provide complete solutions to your personal queries on finances, stocks, mutual funds and schemes that are available in the market. All information related to personal and corporate taxes is provided with market experts who can guide you with best investment procedures as well. We value client’s time and money for which we offer highest quality services at affordable prices. There are many SIP Mutual Funds which are offered by companies to invest in the respective companies with the Wealthcare guidance you can dream big for your future.

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