Are you looking for ways to invest? If so, then a Systematic Investment Plan (SIP) can be the right choice. SIP is a method of investing money in mutual funds. You can opt to invest a fixed amount of money every month till you reach your desired goal. There are different plans and schemes that you can choose from depending on your convenience. Once you start a plan, the fixed amount is deducted from your account every month.
Mentioned below are the best reasons as to why investing in SIP is a wise decision.
- You become a disciplined investor- Investing in SIP makes you a disciplined investor. It is a systematic way to take you closer to your financial goal. Many people are unable to save money or splurge as soon as they get their monthly salaries. However, if you fix a date every month for SIP when your salary gets deposited in your account, you can invest before splurging.
- Begin by investing a small amount- You can start your investment plan with as little as Rs.500 per month. Thus, it is perfect for those who have recently started working or people in their 20s looking for beneficial investment plans.
- Does not make you an emotional investor- It prevents you from investing emotionally. Often people get carried away by the ups of the market and make impulsive decisions that they regret later. However, with SIP investment, you invest only a fixed amount every month, thus protecting yourself from the market’s ups and downs.
- Choose to stop or skip the SIP anytime- Sometimes, people come across any emergency or situations where they may require funds. You can stop or skip your SIP investments for a few months without having to pay any fine in such cases. The decision to stop or skip SIP investments rests entirely on you. You can also increase or decrease your SIP amount according to your convenience. You can further choose to do so in the same mutual fund scheme or any other scheme. Hence, it is a flexible investment scheme.
- You can skip worrying about timing the market- With SIP investment, you do not have to worry about timing the market since you invest a fixed amount every month. When the market is high, your SIP will buy you fewer units of a mutual fund. The opposite happens when the market is low. Thus, it helps you to keep your tension at bay.
If you want to invest in debt mutual funds through SIP, you should gather sufficient information about it before proceeding.
We are sure your confusion has been eased after reading the above-mentioned points. It is a safest and convenient way to start investing since it offers you protection against short-term risks, short-term volatility, emotional and impulsive decisions, and splurging on unnecessary things. It also protects you from the ups and downs of the market.