System Investment Plan
Systematic Investment Plan is a tool which allows investor to invest a predetermined amount into a mutual fund on a regular interval. SIP can be done in debt funds as well as in equity funds. Primarily investors invest the money into equity funds through SIP. SIPs are the best way to invest the money when it comes to disciplined investment. Most of the investors trap in either fear or greed and take wrong decisions. SIP is not about the timing of the market. It is mostly about regular investments. If an investor doesn’t have the time to look the market regularly or doesn’t want to spend time to understand the stock market, then SIP works best for him.
Advantages of SIP
✓ Regular disciplined way of investment
✓ Don’t let investor’s emotion comes in
✓ Rupee Cost Averaging
✓ Benefits of compounding
✓ Long term wealth Creation