Investing in markets is one of the most concerning decisions. As a traditional customer, you will think twice before making any large investment. But with the introduction of SIP, now the situations have changed. It is easy and convenient to make investments. Every year, the number of customers is increasing who look forward to bring their investment in SIP mutual funds. In this blog, we will give you a quick some features of SIP mutual funds.
To the customers who are just beginners in the market, SIP is a new word. SIP stands for a systematic investment plan. It is the most flexible way to invest in the market. The best thing about this plan is that you can invest per month rather than one lump sum amount.
Eleven things you should know about SIP mutual funds:-
1. Amount of investment
SIP gives you the right to invest according to your requirements and convenience. You can start your investment with a minimum amount of Rs 100 or Rs 500 per month. A Small Amount of investment will not develop a financial burden on your head can easily maintain your financial balance.
SIP mutual funds can formulate monthly, annually, quarterly, and semi-annually. It develops a sense of saving habits among investors. Your saving habits play a vital role in the circulation of your money. Tax saving schemes also comes under SIP mutual funds.
SIP mutual funds are of various types. The most common type is a hybrid mutual fund. A Hybrid mutual fund is the one under which the investment portfolio is equally divided between equity and debt financial instruments. Other types of SIP funds are Flexi SIP, Step-up SIP, Perpetual SIP, etc.
4.Timing of the market
The timing indicates the ideal time frame, where the investors can gain a maximum of the benefit in the stock markets by purchasing more units of mutual funds when the prices are comparatively low. With SIP mutual funds, you can invest throughout the year and get better returns.
5.Investments of recurring nature
You have to make regular deposits, like recurring deposits. However, in RD the returns are linked with the bank FD rates, but in the case of mutual funds, you can invest in different financial instruments that link to market-related returns.
Investing in small amounts per month will make you a burden-free and disciplined market investor. You will become smarter about your expenses and start thinking to invest maximum. The regular investment feature of SIP will help you today and in the future.
The main objective of SIP mutual funds is to achieve long-term accumulation of wealth. When you invest through SIP, you invest in a disciplined manner without feeling the stress of market conditions. SIP mutual funds from time to time remind you of your investments and motivate you to move ahead.
8.Safe and sure
Mostly SIP is marked as a safe and sure way of investment and an efficient way to create wealth for the long-term. SIP is generally secure regarding mutual funds. SIP gets stuck to continuous money to earn a fixed percentage of commissions or returns. It makes you worthy of a safe and secure investment nature.
9.Best for the beginners
SIP mutual funds are the best choice for beginners who don’t have experience regarding the market as it averages out the price over some time. The funds in a mutual fund are sub-invested in various sectors. Through this, the investors get the benefit of diversification. You can consult your financial adviser for SIPs which offers several plans for the beginners.
Financial experts regulate the SIP mutual funds. These professionals work on improving the returns of the funds. The SIP mutual fund is well managed and provides you with the best service in all possible ways.
Most people fail in investment activities due to a lack of market knowledge. SIP provides a wide range of investment options. With these various options, you develop yourself as a diversified and disciplined investor. The most common reason why people start investing is they need to save taxes. If you want to invest in SIP, you must target a specific goal. Determining the aim is an essential factor. It is necessary to know the reason behind your investment in SIP. Attach a money value to your goals. A Mutual fund (SIP) will provide you with the best returns than other investment option.
All the SIP features are present online. Online facilities provide complete services from starting till the end with ease of the internet all these services are working 24*7. Things like child education, marriage funds, home loans, retirement plans are necessary for one’s life. These require proper planning with adherence to the amount of wealth and period time. Each year the value of SIP changes. You have to understand the past, estimate the current values, and come up with future possibilities.