Invest in the SIP plans in India

Posted by jigneshshah on May 9th, 2018

Saving in the traditional instruments like FDs and more is not enough to reach your financial goals. To reach your financial goals you need to invest. Mutual funds offer a smart investment option. You can invest in mutual funds through Systematic Investment Plan (SIP). There are many advantages of SIP.

To achieve the financial goals like owning a house or kids education or retirement you can invest in mutual funds. Systematic Investment Plan (SIP) allows you to invest a fixed amount of money in mutual funds regularly. You can invest small amount of money over a period of time to reach your financial goals.

SIP is a disciplined way of investing in mutual funds. It is a useful tool as it allows you to break your big goals into small amounts. You can start an SIP with small amount to reach your big goals. SIP helps you to reach your financial goals. There are many advantages of SIP plans in India. They are as follows:

• As you invest a fixed sum regularly you need not time the market. The long term investment through SIP have the potential to best inflation and give good returns. The long term investments are not affected by market volatilities.
• Investing regularly fixed sum allows you to buy more units when the market is low and less when the market is high. This brings down the average cost of acquisition of units.
• SIP allows you to invest monthly in a disciplined way and this gradually turns you into a disciplined investor.
• As you invest monthly it makes investing a mandatory component while you allocate your resources.
• SIP supports the power of compounding. The longer you stay invested more the benefits of compounding.
• SIP gives you the flexibility to select the investment frequency as per your convenience and requirements.
• When you invest in mutual funds your funds get channelized into future wealth creating investments. It is a better option than keeping the funds idle.

Different strategies for SIP plans in India
There are four different strategies which you can follow while investing through SIP. They are as follows:

• Simple SIP
  In this you can invest a fixed SIP installment amount for the entire tenure.
• Smart SIP
  In this you can invest the regular SIP amount when the market is high and a higher SIP installment amount when the market is low.
• Growing SIP
  In this you can increase your SIP installment amount gradually as your income increases.
• Target SIP
  In this you have to invest to bridge the gap between the actual amount and the target amount.

The author is a blogger and likes to blog on the various topics on mutual fund investments. Here the author has explained about the SIP plans in India.