What are the benefits of SIP?

What is Systematic Investment Plans  (SIPs) ?

What are the benefits of SIP
What are the benefits of SIP?
Systematic Investment Plans (SIPs) have become one of the most popular ways to invest in equity markets, especially to beat inflation rates 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 for a continuous period of time, monthly or quarterly.

Are SIPs a good investment?

Investors' financial goals are typically divided into long-term and short-term goals. While purchasing international holidays, leisure or luxury items fall under short-term goals, buying their own homes, planning retirement funds, and children's education falls under long-term goals. Entering a mutual fund SIP is one of the easiest ways to profit from the effects of compounding of funds on a long-term horizon to meet all your short-term and long-term goals.

The main benefits of investing in a mutual fund SIP are the following:

What are the benefits of SIP


Regular Investment:

SIP allows you to invest money in various mutual funds at regular time intervals monthly, quarterly or annually.

Maintaining discipline in your asset allocation:

The regular investment makes for a good investment discipline, which will help you to a great extent in achieving your financial goals at the end of your investment time horizon.

Compounding power

SIPs help you to a great extent in terms of reducing the value of money you invest regularly. In simple words, through the power of compounding, they help you convert a small portion of the money invested in the long term into a larger corpus at the end of the investment period.

SIP allows small amounts of investment

One of the stand-out features of SIPs is that they allow you to invest in mutual funds for an amount as small as Rs. 100 or Rs 500 or Rs. 1000 per month.

One of the best ways to start a SIP is to contact a financial professional specialist. They will not only provide you with the best SIP option but will also help you align your SIP investment with your financial goals through a good diversification strategy.

List of Basket :

1. Aggressive basket: means for those with high risk-taking ability. Stocks in this basket belong to front-line companies that make up the major indices.

2. Mid-cap basket (very aggressive): means for those with maximum risk-taking ability. Stocks of this basket show a downside as well as being inverted.

3. Medium basket: means for those with moderate risk-taking ability. Stocks in this basket belong to companies that are moderate as well as on the downside.

4. Defensive basket: means for those with low risk-taking ability. Stocks of this basket belong to companies in the defensive sector and show limited levels as well as the downside.

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