What is sip investment

Systematic Investment Plans or SIPs are one of the most popular ways of investing in Mutual Funds. SIPs help inculcate financial discipline and build wealth for the future. With SIPs, you can start small and gradually build a corpus in a systematic and planned manner. What Is A SIP? A SIP is a systematic approach to investing and involves allocating a small pre-determined amount of money for investment in the market at regular intervals (usually every month) The SIP route is the preferred way of investing in stocks and Mutual Funds because it allows you to participate in the market while managing risk better. How do SIPs work? SIPs work on the following two principles- • Rupee Cost Averaging SIPs can help you escape market volatility by eliminating the guessing game of market performance. Regular investing ensures that the average purchase cost is evened out in the long run. When the markets rise, you get fewer units, and when the markets fall, you receive more units. This minimizes your risk and ensures you acquire investments at a lower average cost per unit. • Compounding Saving a small sum of money regularly for long periods of time can have an exponential impact on your investment because of the effect of compounding. The following examples illustrate that: ‘A’ starts investing for his 60th birthday at the age of 40. Assuming returns of 7% and a monthly investment of Rs. 1000, his total corpus at the end of 20 years will be Rs. 5,28,000. ‘B’ starts investing f...

Every industry once matures during its life cycle, it gains acceptance and comes up with certain practices that becomes common phenomena. Such practices get curated, discussed, debated and often adopted in several allied industries as well. The banking and lending segment within the financial services industry introduced the concept of equated monthly instalments or EMIs, which has revolutionized retail lending over the past two decades. Such is the draw for EMIs that many goods and services are no longer sold at their price, but EMI. Similarly, in the mutual fund investing space, the prominence of Systematic Investment Plan or SIP is no different. Over the past decade or so, SIP has become synonymous with mutual fund investing. And such is the popularity of SIPs that even seasoned investors consider it to be an investment and not a tool to invest in mutual funds. What is an SIP? The simple structure of an SIP lets you invest a fixed sum in various mutual funds periodically. So, you could invest in a fund of your choice across frequencies such as monthly, quarterly, weekly, daily or any other periodicity that you are comfortable with. SIP is nothing but a smart investing tool to invest in mutual funds. A disciplined approach to investing, especially in mutual funds has several possible benefits, especially in the long run. This regular investing could become a habit, if you include mutual fund investing as part of your monthly household budget, which you manage with your r...

In the previous article, we discussed SIP investments. SIP, also known as a Systematic Investment Plan, is a facility offered by mutual funds to the investors to invest in a fund properly. With a SIP facility, investors can invest a fixed amount of money in pre-defined intervals. Note that the fixed amount of money can be as low as INR 500. The SIP route to investment is necessary as it helps you to invest in a time-bound manner. There is no need to worry about market dynamics when you are investing via SIPs. So what is SIP and why it’s so important? Let’s find out. What is SIP investment? Currently, Indian Mutual Funds have currently about 5.5 crore SIP accounts through which investors invest in various schemes. A SIP is one of the two ways in which you can invest in a mutual fund scheme. The other way to invest in mutual funds is through a lump sum amount. In a SIP, you essentially invest a fixed amount of your money on a specific date. Note that every mutual fund comes with its own minimum investment amount that you have to strictly adhere to. To achieve financial success in our lives, we typically tend to work harder. And it is only by working hard that we can achieve our objectives in life. But with a SIP, your success is always in progress. SIP allows you to invest in mutual funds monthly, quarterly andstep-by-step. It is essential to note here that SIP averages out your cost of investing. Moreover, with SIPs, you can benefit from the power of compounding. What makes...

Systematic Investment Plan (SIP) Systematic Investment Plan (SIP) is a way of investing in mutual funds through which an investor can invest a fixed amount in mutual fund scheme of his/her choice at regular intervals. Like a Recurring Deposit, an investor can invest fixed amount at regular intervals (monthly or quarterly) through SIP. Rather than investing a large amount one-time through lump sum mode, more investors now prefer to invest smaller amounts regularly through the SIP mode. You can start investing through SIP in a mutual fund scheme with an amount as low as Rs 100 per month. Scheme Name NAV RETURN ACTION 1 Year 3 Year 5 Year Kotak Emerging Equity Fund (G) 82.6080 26.21% 33.82% 15.84% ICICI Pru Large & Mid Cap Fund - (G) 619.2300 23.47% 31.30% 14.27% SBI Equity Hybrid Fund (G) 213.6723 14.16% 18.13% 10.95% HDFC Flexi Cap Fund - (G) 1,227.2090 28.23% 32.89% 14.90% Nippon India Multi Cap Fund (G) 185.4464 35.56% 37.74% 15.31% Right time and amount to start a SIP There is no time like NOW to start investing. The earlier you start investing, the better it is. This gives the invested money more time in the market, thereby increasing the growth potential of your investments. A SIP calculator can help you determine the right amount for starting a SIP. You should choose an amount that you can invest regularly without stopping your investments. A Systematic Investment Plan (SIP), more popularly known as SIP, is one of the most convenient modes of investment. SIP allows an...

In the race between the hare and the tortoise, it was the slow and steady tortoise who won. Though the hare got off to a blazing start, he fell asleep before reaching the finishing line. But the tortoise kept going till he reached the end. He was not deterred by the taunts of the hare. When it comes to investing for your financial goals, your approach should be like that of the tortoise. Have patience and do not let minor setbacks derail you from your path of wealth creation. An easy and convenient way to achieve this is by investing in mutual funds through Systematic Investment Plans (SIPs). Just select the mutual fund, decide the amount to be invested and start investing. Since the SIP is linked to your bank account, the money gets credited to your SIP account every month. Why you should invest through SIPs: A SIP is a mode of investing in Once you set up a SIP in a mutual fund of your choice, a fixed amount gets deducted monthly from your SIP offers flexibility to increase/decrease the amount. As your salary rises, increase the SIP amount to match it. If at any point in time you are facing a cash crunch, you can reduce the amount, or even stop the SIP temporarily. This offers a complete control over your investments. Each monthly instalment gets added to the earlier one and you earn returns on a higher base each month, generating higher returns. Benefits of SIP • An ideal solution to the new dreams: One can plan different life goals be it conventional goals such as chil...

How to become rich? On how mutual fund SIP can help can help you become rich in long term, Kartik Jhaveri, Director — Wealth at Transcend Capital said, "Mutual fund SIP is an instrument tool that allows an investor to get average return given by the ₹500. So, it is suitable for even those who don't have a whopping lump sum amount for one time investment. Via SIP, a disciplined investor can accumulate big corpus in long term as long term SIP gives compounding benefit to an investor i.e. interest on interest. So, longer is the time, higher will be the compounding benefit." Kartik Jhaveri said that if an investor invests for 15 years or more, one can expect to get 15 per cent or more return on one's money. However, in the case of less than 15 years but more than 10 years, one can expect to get around 12 per cent mutual funds return. Mutual fund return calculator On how to get ₹1 crore maturity amount from SIP investment, Pankaj Mathpal, MD & CEO at Optima Money Managers said, "Genius don't do different thing, they do things differently. For a smart investor, SIP step up tool is something that can help to accumulate highest possible amount in smallest possible time. In this monthly step up, a mutual fund SIP investor is advised to increase one's monthly SIP in sync with one's annual increment or rise in annual income." SIP calculator Mathpal said that normal annual SIP step up suggested is 10 per cent but for such ambitious ₹1 crore investment goal in 10 years, one needs to ma...

SIP stands for Systematic Investment Plan. It is an investment strategy in which a fixed amount of money is deposited at regular intervals in a mutual fund scheme to generate returns over a period of time. You can generate a comprehensive corpus by investing at regular intervals small sum of money through SIPs over a long term to achieve your financial goals. It is an automatic investment route, so after the SIP mandate is set up, the fixed amount of money is automatically debited from your account and credited to your mutual fund account on a predetermined date and in a selected fund scheme. If you are thinking, 'what is SIP,' you have come to the right place. In this article, we will see what is SIP and how it works, among others. Also Read – SIP How does Systematic Investment Plan work? A Systematic Investment Plan (SIP) allows investors to invest a fixed amount of money at regular intervals. The amount can be weekly, monthly, or quarterly. The idea behind SIPs is that it helps investors to invest in a disciplined manner and to take advantage of the power of compounding. SIP Mutual Fund facility was created with investorsyour comfort in mind. You can choose the plan, the amount you want to invest, the frequency, and the dates you want to invest, among other options. When an investor chooses to invest in a SIP, they will receive units of the mutual fund at a predetermined rate. The price at which these units are purchased will depend on the prevailing NAV (Net Asset Valu...

• A systematic investment plan involves investing a consistent sum of money regularly, and usually into the same security, which could be a mutual fund or funds. • A SIP generally pulls automatic withdrawals from the funding account and may require extended commitments from the investor. • SIPs operate on the principle of dollar-cost averaging, buying more shares when prices dip. • Most mutual fund companies offer SIPs. Mutual Funds Mutual funds are investment vehicles that pool money from many investors and then put that money to use following a stated strategy. For example, one mutual fund may be interested in generating extra returns by identifying under-valued small-cap stocks with high growth potential by undertaking in-depth research. Another mutual fund may instead seek to simply replicate the S&P 500 index in a passive manner. Either way, mutual funds allow investors to get professional money management across a range of strategies and investment styles. Revere Asset Management, Dallas, TX A systematic investment plan, or SIP, simply means making periodic and scheduled contributions to your investment account or a specific security. Dollar-cost averaging is a SIP in its simplest form. For example, investing $500 per month total in two different mutual funds of $250 each would be a SIP. But a SIP is not an investment strategy like a mutual fund. A mutual fund is a professionally managed fund in which the manager invests according to the fund's prospectus. While the ...