Systematic investment plans or SIP are a popular means of saving and growing your money
. Many misunderstand SIPs to be a kind of mutual fund. But in reality it is a method of investing in a mutual fund. SIP instructs the investor to procure certain units from the mutual fund stocks on a particular given date every month of the year.The investor then decides the amount and the funds to buy.
Investing through SIPis certainly the best solution to grow your money in the stock market and surviving the risk as well. It is the most practical thing to do in the current scenario when the stock markets are booming with uncertainty. Some of the benefits of investing in one are as follows
Expert execution
When you invest in an SIP your investments are handled by experts of the industry. They are the best people to invest your money in the right funds and take appropriate steps to avoid market volatility. They constantly carry out extensive researchon the company, the industry and the economy and are updated of the new developments. This is a major advantage you get on investing with a systematic investment plan,as many of us dont have the expertise and the time to keep track of the market.
Invest money in different sectors
SIP gives you the facility of investing in different sectors even with the small amount you put in. Hence, you can enjoy diversification and better safety from risk by investing a basic amount. This is excellent for many investors as not everyone is capable of investing huge amounts required for diversification.
Well regulated
This mode of investing in the stock market seems safe as it is well regulated by SEBI (Securities and Exchange Board of India) and AMFI (Association of Mutual Funds in India). Over the years, these regulatory bodies have introduced regulations to ensure smooth and transparent functioningof the mutual funds industry. Plus an investor has the flexibility to change mutual fund as and when required.
Investment in budget
SIP lets you invest with amounts as small as Rs.500-Rs.1,000. So you invest a small amount regularly in mutual funds as opposed to a large one time investment. This makes investment an easy process for you as it does not affect your monthly budget. Moreover, you can even avoid any repercussions of market volatility as every month you may get an opportunity to buy at lower levels.