August 14, 2017

Sreekanth B

Benefits of Systematic Investment Plan In Equity Mutual Funds

Systematic Investment Plan enables you to build a portfolio over a longer time horizon with small investments at regular intervals reducing the risk of market volatility. You can choose between Quantity based and Amount based SIPs in Stocks, Mutual Funds, ETFs and Gold.

Features of SIP

For long-term wealth creation through equity market you need discipline and long term time horizon which are inherent features of SIP. The following features of SIP makes it fit for equity market.

1.     Simple and disciplined approach towards investment.

2.     Investment possible with small sum of money invested regularly to accumulate wealth

3.     Based on concept of Rupee Cost Averaging

4.     Flexibility in terms of  Amount or Quantity based SIP

5.     Flexible intervals like Daily/ Weekly/ Fortnightly/ Monthly basis.

Benefits of SIP

As common investor doesn’t have enough time and resources, SIP proves to be a viable option for them. Listed below are the important benefits of this instrument.

1.     Reduces Risk because of Rupee Cost Averaging

2.     SIP can be started with very small amount of money

3.     Timing the market is not necessary

4.     Long term financial goal can be aligned with SIP

5.     Disciplined approach towards Investment helps in controlling the emotions.

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