Importance of Mutual Funds SIP | Gupta Investments

Mutual funds are one of the most popular investing options available to both novice and seasoned investors. You can invest in mutual funds either through a systematic investment plan (SIP), which requires the investor to invest at regular periods, or through a lump sum (one-time) investment.

SIP or systematic investment plan is one of the best ways of investing in mutual funds. An SIP allows you to invest little amounts at regular periods, such as weekly or monthly and units are allotted for the amount invested in each instalment.

 

How SIP Works?

When you invest in a mutual fund scheme through a SIP, you buy a specific number of fund units equal to your investment amount. The biggest advantage of SIP is that one need not time the market. Rather than trying to time the market, investing every month will ensure that you are invested at both the high and low points of the market, allowing you to make the most of an opportunity that may be difficult to forecast in advance.

While opening a mutual fund account and investing via SIP is seamless and convenient given that online platforms today help even first-time investors complete the registration process within just a few minutes and in a completely paperless manner, it's important to know the factors you need to address before starting an SIP.

 

Benefits Of Investing In SIP

Condition choosing for mutual funds

Identify your goals

Identify the goal for which you want to start the SIP. Besides goal, also figure out how much time you have to attain that goal, in other words how much can your corpus grow and compound.

Assess your risk profile

Understanding your risk tolerance and the type of investor you are will help you choose the correct mutual fund schemes and asset classes to invest in. You may have a larger risk appetite as a youthful investor than those in their middle or near-retirement years. A balanced fund or a diversified large-cap equity fund is a good choice for risk-averse investors.

Expense costs

The fund's expense ratio, as well as the entry and exit loads levied at the time of redemption, are all key aspects to consider when choosing a scheme. Check the fund fact sheet, portfolio statement, and performance tracking websites.

The calculation is on the basis of your financial goals, time horizon and expected rate of return. It is essential to choose an appropriate transaction date and link your SIP investment with your bank account.


Conclusion

Reviewing your future goals and portfolio returns on a periodic basis is a great idea to maintain your financial well-being. As a result, make sure that your SIP investments are in a worthy mutual fund scheme.


Website: Gupta Investments

Blog: Mutual Funds Investment


Location: India

Comments

Post a Comment

Popular posts from this blog

Check Your Health Insurance Policy Status

Image
  There are various liabilities for earning individuals where you might spend your income. Purchasing a car or a piece of electronics may be viewed as a liability. The cost of a medical emergency affecting you or a loved one, though, is one of the largest liabilities you could encounter in life. Investing in a family's worth of comprehensive health insurance might easily prevent such liabilities. However, there may be times when you overlook checking the status of your coverage, particularly in the midst of a medical emergency. Here's how to make sure your coverage is still in effect and save yourself any hassles in the event of a medical emergency. Importance Of Verifying Accuracy Imagine the following case: You and your family are traveling. Your father unexpectedly becomes ill while sightseeing and needs to be hospitalized. You enter your policy information while he is in the hospital to use the cashless claim feature. However, you are told that the non-payment of prem
Read more

HOW SHOULD YOU PLAN FOR RETIREMENT?

Image
Introduction: Early retirement planning is still a relatively new concept in India. People who reside in cities and villages still rely on their offspring after retiring, if we ask them. Some retired public sector workers can rely entirely on their children, while others can bank on their pensions.   They don't even consider the possibility of early retirement planning. How to plan for retirement in India? Here is a guide to early retirement preparation in case you are now convinced about the idea but are unsure of how to proceed. Early Start: Time is money holds true for investment goals including retirement planning as well. This is because the amount you need to save amount every month to reach your goal will depend on how much time you have to achieve the goal. It means you can reach your retirement goal with much smaller monthly savings if you begin early. However, the delay will ensure you have to save more every month. Start investing early to reach your retireme
Read more

HOW TO CHOOSE THE RIGHT HEALTH INSURANCE POLICY WITH ADEQUATE COVERAGE IN YOUR 30s?

Image
  What is Health Insurance? Health insurance, often known as medical insurance, is a financial protection instrument that covers unexpected medical, hospitalization, and surgical expenses. It provides financial support for compensating medical, hospitalization, and surgical expenses. Health concerns Don't wait till you're old to get sick, especially with today's lifestyle. Frequent hospitalization can make a big dent in the savings of even those who are as young as 30 years old. This could severely deplete their finances. In such situations, health insurance plays a crucial role. Moreover, if you buy health insurance at young age, you may afford high coverage at a lower premium. But there are a few important questions that often come to mind. But how much health insurance coverage do you need? What are the things to look at while buying health insurance when you are in your 30s? Buying a health insurance policy when you are young  Purchasing a health insurance pol
Read more