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This content is for informational purposes only and is not intended to provide financial advice.
Investors are often confused when it comes to choosing the right investment vehicle which can help accumulate a significant corpus. Although there are various options available in the market which can boost your investments over a period of time, there are some which are extremely attractive and help to build your investments by putting in smaller amounts at regular intervals like the Systematic Investment Plan (SIP). You can calculate how much return your investments would yield by using the SIP Calculator. There are various online financial platforms that have a SIP Return Calculator that calculates the amount of the exact return that you can get after a specified investment term.
Let’s take a look at why SIP investments are the best way to invest
Helps you in being a disciplined investor
One of the biggest reasons why SIPs are gaining popularity is because it helps you become a disciplined investor. Regular investments help you get closer to your financial goals, and SIPs are an ideal way to achieve those goals. You get accustomed to a disciplined investing pattern when you start investing via SIPs, and that’s extremely beneficial for your long-term financial goals.
Averages cost of mutual fund units
SIPs are a great way to reduce the average cost when the markets are experiencing a downfall as the net asset value (NAV) drops down in such scenarios, which investors can capitalize on. When investing via SIPs, the average cost of the units remains lower than lump sum investment when markets are on an upswing.
Very Low Investment Amount
With SIPs investors can start with an amount as low as Rs. 500 a month which is ideal for those who don’t want to block their funds in other investment vehicles where one requires to pay a lump sum amount.
Doesn’t get affected by market volatility
You don’t have to time the entries and exits, as SIPs are not affected by volatile markets. When the markets are running high, a few units will be added to your portfolio and vice versa. This way, SIPs balance out the investments irrespective of the market conditions.
Flexibility
SIPs can be paused in between in case you are short of funds at any given point in time, as there’s an option to skip the monthly payments in case of emergencies.
Safety
The Security Board Exchange of India (SEBI) and the Association of Mutual Funds in India (AMFI) have laid down strict policies to protect investors, which has encouraged complete transparency across the mutual fund industry.
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