Systematic
Investment plan ( SIP ) is a financial planning tool that allows you to invest
in mutual funds through small periodic instalments. Moreover you can also
select the tenure of your investments.
Investments do not always have to involve a large sum of money. One can easily
start with investing small chunks of money on a regular basis through SIP’s. By
investing small amounts on a regular basis through SIP’s , one can create
capital over the long term.
Apply the basic investment rule
START EARLY
+
INVEST REGULARLY
+
SELECT THE RIGHT ASSET CLASS
=
GOAL ACHIEVEMENT
How does it work?
The fundamental rule of SIP’s is to start an early and regular investment in the right asset class, which eventually helps you achieve your long term financial goals. Let us understand these fundamentals in detail.
Start Early
SIP’s have a
compounding effect on your investments. Starting early can transform even a
trivial amount into huge corpus in the
long term.
Invest Regularly
One can never reap the benefits of investing in the markets by buying at the lowest price and selling at the highest, as judging the market movements is not possible. Hence it is very vital to keep investing smaller portions of money on a regular basis to be able to build a fortune in the longer run.
Right Asset Class
Equity has delivered better returns against inflation as compared to other asset classes over a longer period of time.