Systematic Investment Plan & Its Importance

Systemic investment is a popular financial plan that enables the investor to invest regularly, a fixed sum of money in a mutual fund scheme for a prolonged period of time. This investment plan helps you to accumulate wealth in the long run, which serves as a security blanket in unforeseen financial crisis and retired life.
Even a person with constricted salary deserves financial security and a comfortable lifestyle. Systematic investment plan enables the salaried people to achieve a financially secured future, by depositing a minimum sum at regular intervals at the prevailing Net Asset Value.
Note: The market conditions may result in the rise and fall of Net Asset Value of the schemes.
What are the benefits of Systematic Investment Plan?
Regular investments: While timing the market is crucial for accumulating wealth; it requires a thorough knowledge of market, timely research and analysis to be able to master the art of timing the market. Through Systematic investment, one can easily eliminate the constant need of tracking the market as the plan inculcates in the investors a habit of regular and disciplined investments.
​Rupee Cost Averaging: This is an excellent investment strategy, which is effective in eliminating the need to time market. While investing a fixed sum of money at regular basis for over a period of time, you are able to lower the average cost of purchasing by buying fewer units, when the unit costs is high and more units when it costs low.  
Compounding returns: Systematic investment requires an investor to invest a fixed sum of money for a long time. Disciplined and regular investment leads to accumulation of wealth over the years and also earns the investor compounded returns on the sum.
Income in old age: The early you start your regular savings the better is your chance of accumulating wealth. Investing even an insignificant sum of money for a prolonged period of time can prove beneficial in the creation of wealth. If you manage to start investing early in your work life and invest regularly till you reach the age of your retirement, you will enjoy a smooth flow of income even in your retired life.
How does Systematic Investment work?

In this financial plan, you are required to invest a fixed sum in regular intervals be it weekly, bi-weekly, monthly or in fact any frame of time chosen by you. However the most common interval is every month. The invested sum is subject to rise and fall depending on the market conditions; the investor benefits from the fall in the market price of shares by purchasing more units. When the market price of the shares rises, the investor can minimise loss and protect shares by purchasing less units. This increase and decrease in the number of purchasing units has an effect on the average price of units; the investment in the scheme is profitable as the average price always inclines towards the lower end.
Don’t wait as you can start right now, no matter how low you choose to begin with. The magic of compounding works your money round the clock. Investing in a scheme seems tricky but not hard; if you want to know about systematic investment plan in depth or want more details regarding the whole investment procedure, feel free to get in touch with us. We make investments easy and simple.

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Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Past performance is not an indicator of future returns. Wealth Redefine is a AMFI registered Mutual Fund distributor – ARN - 85350

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