Systematic investment plan meaning

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(##include msid=4006719,type=11 ##) Definition: Systematic Investment Plan is an investment strategy wherein an investor needs to invest the same amount of money in a particular mutual fund at every stipulated time period. Description: Investing in SIP enables an investor to take part in the stock markets without actively timing them and he/she can benefit by buying more units when the price falls and less units when the price rises. This scheme helps reduce the average cost per unit of investment through a method called Rupee Cost Averaging. For Example: A person invests Rs 1000 for ten months in SIP. We will find out that the actual average purchase cost of asset would be lower than the average NAV of his investment over 10 months, which is the key benefit of Rupee Cost Averaging. Actual average purchase cost as per SIP = (1000X10)/ (100+200+67+71+67+50+45+40+37+34) = 14.06 Also See: NAV, Mutual Fund, Rupee Cost Averaging, Investment : Arbitrage fund is a type of mutual fund that leverages the price differential in the cash and derivatives market to generate returns. The returns are dependent on the volatility of the asset. These funds are hybrid in nature as they have the provision of investing a sizeable portion of the portfolio in debt markets. Description: Arbitrage funds are the panacea for low risk taking investors. I : A benchmark is an unmanaged group of securities which are considered as a 'benchmark' to measure a fund's/stock's performance. Benchmarks are gener...

SIP Investment Funds to Invest in India Systematic Investment Plan (SIP) is a method of disciplined investment in market linked funds offered by fund houses (Mutual Funds), Insurance companies (ULIP) and financial institutions. Best SIP plans offered by these fund management institutions, have given very high returns to disciplined investors even during volatile market scenarios. Read More What Is SIP - Systematic Investment Plan? Systematic Investment Plan is commonly known as a SIP. In India, SIP investment plans allow you to invest a fixed amount periodically in your favourite mutual fund schemes, and regular-premium So here's " Mutual Funds: Here, you are allowed to contribute a pre-determined sum of money on a weekly, monthly, or quarterly basis. ULIP Plans: Here, you can avail of all the plan benefits with regular payment of policy premiums in the frequency of Monthly/ Quarterly/ Half-yearly/ Annually. Important Features of SIP Mutual Funds and SIP ULIP Plans: • SIP mutual funds are flexible in nature, thus, investors can choose to decrease or increase the amount of investment or stop investing in the plan whenever they want. • SIP ULIP plans allow investors to benefit from Top-up premium payments in case of availability of additional money with you for investment and gain higher maturity returns. • SIP Mutual Funds and SIP ULIP plans are pocket-friendly investments to build significant wealth in the long term. • SIP is the safest and best choice of investment for be...

Posted Date: 03 Dec 2011 |Updated: 03-Dec-2011 | Category: | Author: Nidhi | Member Level: |Points: | SIP or Systematic Investment Plan is one of the best investment plans. Investors with small savings and low risk bearing capacity can also earn high profits from it. Learn here more about it and its working. Meaning of SIP Systematic Investment Plan is a kind of mutual fund which provides an opportunity to investors to invest their small fixed amount of savings at regular intervals. Like each drop of makes an ocean, similarly small savings in SIP results into large fund in the future. Under SIP, a certain amount of money of invested at regular daily/ weekly/ monthly intervals which results into huge savings at the end. SIP can rightly be called as "disciplined mode of investment" as a form of discipline is maintained in SIP. You can resemble SIP (Systematic Investment Plan) with Recurring Deposit account as a small amount of money is invested at regular time intervals. The only difference is that RD account is managed with a bank or post office whereas SIP account is managed with mutual fund. A layman with his savings of just Rs. 100 can also invest in SIP. With such small savings, he can enjoy the benefits equivalent to Equity Mutual funds. Systematic Investment Plan provides you freedom to invest in mutual funds with small savings instead of lump sum investment. thus you can invest Rs. 100 per month for certain years instead of investing Rs. 10,000 or Rs. 5,000 in lump s...

Systematic Investment Plans (SIP) are regulated as Periodic Investment Plans under the federal securities laws. The primary objective of a SIP is to enable investors to clearly define an investment goal and then to help them reach it. While the majority of these plans are sold to military personnel, they are also sold to civilians. These plans allow you to accumulate shares of a mutual fund indirectly by making small regular monthly payments, usually as little as $50, over a period of 10, 15 or 25 years. Individual plans can differ from one another. For a specific type of systematic investment plan—sometimes referred to as a contractual plan or periodic payment plan—an investor must make a long-term commitment of 10 or 15 years. These plans come with high upfront costs and are expensive if the full term of payment is not completed. Indeed, sales fees are sometimes as much as half of your first year’s investment. Investors should beware of SIP policies containing misleading claims. It is also important to keep in mind that if you invest in a SIP, you will not own shares in a mutual fund. Rather, you own interest in a trust, and the trust invests your regular payments in mutual fund shares. For more information, see: • Financial Industry Regulatory Authority (FINRA): • The Securities and Exchange Commission (SEC): • Bankrate.com:

Systematic Investment Plan: The Basics A systematic investment plan (SIP) is a plan in which investors make regular, set payments into a specific investment, usually a mutual fund. Investors can also use a SIP to invest in a Many investment offices or mutual fund companies offer SIPs as an option to investors. SIPs allow investors to put a small, fixed amount of money at set intervals into various investment options, usually mutual funds. This allows investors to take advantage of a long-term, committed investment strategy, as well as compounding returns How a SIP Works When enrolled in a SIP, investors invest a set amount of money on a regular basis into a mutual fund, retirement fund, or other investment accounts. These funds are used to purchase a fixed number of shares, which will vary depending on the share’s price. For example, the higher the share’s price, the lower the amount purchased; the lower the share’s price, the more are purchased. SIPs can be used to invest in a range ofinvestment vehicles and accounts. Contributions via a systematic investment plan are usually made weekly, monthly or quarterly, but they can also be set up to be made semi-annually or even annually. It’s important to keep in mind that a SIP is a Pros and Cons of SIPs A systematic investment plan can be a good opportunity for those that are looking to invest in safe and steady investment vehicles. There are some drawbacks, though, so it’s important to make sure you understand both sides befor...

What is SIP? A Systematic Investment Plan (SIP), more popularly known as SIP, is a facility offered by mutual funds to the investors to invest in a disciplined manner. SIP facility allows an investor to invest a fixed amount of money at pre-defined intervals in the selected mutual fund scheme. The fixed amount of money can be as low as Rs. 500, while the pre-defined SIP intervals can be on a weekly/monthly/quarterly/semi-annually or annual basis. By taking the SIP route to investments, the investor invests in a time-bound manner without worrying about the market dynamics and stands to benefit in the long-term due to average costing and power of compounding Benefits of SIP Investing Power of Compounding When you invest regularly through SIP and invest for the long term, the benefits are magnified by the compounding effect. Compounding effect ensures that you earn returns not only on your principal amount (actual investment) but also on the gains on the principal amount i.e. your money grows over time as the money you invest earns returns. And the returns also earn returns. If you start SIP at age 30, as per the illustration shown a corpus of approximately Rs. 3 crores can be generated at retirement. If you would have waited 10 years and started SIP at age 40, a corpus of approximately Rs. 0.9 crore would have been available to you at retirement i.e. a difference of Rs. 2.1 crore – which is the ‘cost of delaying starting SIP’ Goal based SIP Investing We have many financial g...