An early start: Advantages of SIPs

In the investment market, Systematic Investment Plan or SIPis quite popular as an effective financial plan. Its features encourage the investors to invest a fixed sum of the principal amount at regular intervals that stretch over a period of time. Even a person with limited income can avail the benefits of financial security if they start putting away a small portion of their savings into SIPs early in their life.

The perks of investing early in the SIPS:

Everybody irrespective of their financial standing deserves to lead a comfortable life and enjoy financial security when the source of income is constricted.

The perks of early investment in the SIPs are as follows:

  • Disciplined investments: Thorough market knowledge, skilful research and analysis are crucial for timing the market properly before investing in it. SIPs enable its investors to inculcate these positive investment habits and help them adopt a disciplined approach towards investments.
  • Buy low sell high:Regular investment eliminates the need for timing the market; which means investors tend to continue even when the market is slow or stagnant. The habit of purchasing units at a time when the market condition is bad enables the investors to buy them at a low cost. This helps them lessen the average of the overall cost and earns them higher returns. The investors who start an early investment in SIPs derive the most benefit through this feature.
  • Benefit of compounding:Early and regular investments in systematic investment plans offer the advantage of compounding the returns of the investors. Investors reinvest the returns earned on their investment and reap its benefit in the long run in terms of wealth creation.
  • Strong corpus:When you start an early investment in the SIP, you improve your chance of building a strong corpus over the years. An investor who starts early in their work life is more likely to accumulate wealth that enables them to lead them a comfortable lifestyle long after they have retired.

Tips for the new investors who are willing to invest in SIP schemes

  • Create a list of financial goals or objectives that you want to achieve through systematic investments.
  • Decide a principal amount of investment that you are willing to invest monthly or quarterly and deem it effective to help you meet your financial goals.
  • Scrutinize the SIPs schemes its terms, returns and risks before choosing the most suitable scheme for meeting your needs.
  • Choose a plan that works best for the long-term to avail of the benefits of rupee cost averaging and compounding returns even in bad market phases.
  • Try to diversify your investments across different SIP schemes to ensure steady returns and for a relaxed burden of risk.

Investments aren’t as tricky as you think it to be. The key to simplify investment is through proper market knowledge and professional assistance. Contact our professional experts and financial advisors to find out in details how investing early in SIPs will benefit your financial stability in the long run.

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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 - 167127

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