Wednesday, 23 March 2016

Systematic Investment Plan (SIP)

For Investment purpose, we often wait to collect a large amount of money and invest it all at once. These investments are done to achieve our future goals like Buying a house, Child’s Education, Marriage or Retirement Planning.However recurring household expenses always erode the money which we would have otherwise kept for investments and the result- we end up compromising on our financial goals.

Systematic Investment Plan (SIP) is a financial planning tool that allows you to invest in mutual funds through small,
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periodic installments.
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SIPs help you set aside a fixed amount every month for investments thus contributing towards your financial goals.
Start Early + Invest Regularly = Create Wealth
Save Now
Save Later
Saving Starts
10 Years Later
Savings Monthly SIP
Rs. 5000/-
Rs. 8000/-
Saving Years
Total Amount Invested
Growth at  12% Rate of Interest
How SIP works in MF -
Systematic Investment Plans (SIPs) is an investment option that allows you to invest a fixed amount every month or every quarter through your mutual fund scheme. With several benefits over conventional savings and investment options.
Key Features:-
1. Discipline in Investments:- (As one can save on monthly basis)
Investing in an SIP helps you develop a discipline in investments, since you will be actively planning to set aside that much money at regular intervals..
2. Easy to Invest & Affordable:-  You have the convenience of direct debit of your SIP installments though Electronic Clearing Service (ECS) facility. Your SIP amount automatically gets debited from your bank account on the predetermined date.
3. Cost Averaging:-  (At different level one can Invest in stock market - some at high & some at low )
A more successful strategy is ‘Rupee Cost Averaging’ wherein you invest a fixed amount regularly. Thus you purchase more when the prices are low and purchase less when the prices are high. SIP Investments take advantage of this strategy & in the long term, the SIP investor gains as his investments are unaffected by market volatility.
4. Value Averaging:-  (Well Managed Portfolio  by Experienced Fund Manager)
The Advantage of investing small amounts regularly over a long period is that you will ride out the ups and downs of the equity market. Here’s how: since you invest every month (or quarter), regardless of the market, you will get a better overall price for your investments, and therefore, better returns. This is the law of averaging returns.
5. The power of compounding:- (Taking a smart decision now could help you achieve your future goals)
Setting aside a small amount every month can over time, add up to a quite a large sum, thanks to the power of compounding.
6.Flexibility & Liquidity:- (One Can Stop Anytime & Withdraw anytime after 1 Year of Investments done)
Note : Actual Updated  Mutual Fund  SIP mode Performance attached .   
I hope this will give conviction how Mutual Fund works in SIP mode, kindly don’t mix with Direct Equity Investment category