SIP: A Journey or a Destination

Investors tends to put their money in mutual funds with the hope of earning extra income, so that, they are able to fulfil their financial needs and achieve their ultimate financial goals. While investing in a good investment tool like SIP is crucial to meet one’s desired financial goals, investments are not an end in itself, rather they are a means that has to be followed to reach the end.

The reason why SIP is a journey and not the destination

Each person has a distinct financial goal that they want to achieve within a certain time in their life; investors should understand that their financial goal is like a destination that cannot be reached immediately. Investors need to treat their financial goal as their destination and look at investment ventures as their journey. The following features and benefits of SIP make it a pleasant journey and the ultimate destination:

A Disciplined Approach: In order to reach a financial goal, one has to consistently save and invest money in a disciplined manner over a stretch of time. When an investor puts their money in SIP, they agree to invest regularly, irrespective of the prevailing market. This habit becomes a disciplined approach towards investments and encourages regular savings for the fulfilment of their goal.

Small Amount: To move ahead in the journey to reach the desired destination one has to take small steps towards it. Investing in SIPs is equivalent to such small steps; the feature of investing a minimum sum on a regular basis helps investors to move one step at a time towards their ultimate destination of achieving their financial goals.

Power ofCompounding: No matter how insignificant is your sum of investment, if you invest in SIP on a regular basis you are bound to enjoy a steady flow of income. The power of compounding is such that even a small sum can grow over time and generate wealth that’s sufficient to meet a targeted financial goal.

Rupee cost averaging: The great thing about SIP is that it allows investors to buy units at a lower price in a volatile market and sell those at a higher price in a booming market. Over time, this helps investors to lower the average cost of their investment and also help to even out market risks.

Flexibility:Every person has to follow a different road map to follow their respective destinations; similarly, investors need to adopt a different investment plan and approach to achieve their financial goals. In SIP, investors can opt for an investment structure depending on their financial needs, ultimate goal and time. This flexible feature makes it possible for investors to fulfil their goals without putting unnecessary pressure on them.

Adoption of a systematic investment plan for the fulfilment of financial needs will only serve as a road to the investor’s ultimate financial destination. Contact our team of financial experts and advisors to find out how you can achieve your financial goals by investing in SIPs.

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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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