5 Reasons You Must Invest in SIP
If you wish to invest fixed sums at regular intervals, SIP in Mutual Funds is the best option. If you wish to avoid the pitfall of equity investment and still want higher returns, SIP is a worthy choice.
Below we list 5 reasons as to why you must invest in SIP.
5. More is the investment period better are the results
A worthy reason for doing SIP is that increase of investment period ensures better safety of stock. You will always get better returns when you invest in SIP for 10 or 15 years in comparison to any other kind of mutual fund investment.
4. Better way for regular investment
If you are an early investor putting together large amount of money is not a viable option. Through SIP you can always invest and contribute small amount on regular basis. The best advantage of SIP investment is that you do not need to cut through your expenses as the minimal amount you invest will not affect your monthly expenses.
3. Long term perspective use
If you are thinking of investing in permanent asset as house or vehicle it will require large investments. If you are thinking of raising this kind of amount it will need huge amount of corpus fund.
SIP will help you in fulfillment of this objective. Small investments done at regular interval will definitely help you in building a huge corpus fund.
2. Helps in bringing down the average cost of buying
SIP works on the principle of Rupee Cost Averaging. Under this concept small amount of money is put in the market when the same is low and will give large number of units when the market is performing well.
Thus the average cost of these two separate times of investments will come lower than one time investment cost.
1. No need to put a time cap on the market
Another unique advantage of investing in SIP is that you do not need to time your investments. Rupee Cost Averaging method will itself bring down the unit cost and will help in better performance of your investment.
In today’s rapidly changing world, it is important to invest smartly. SIP through Mutual Fund is a good way of making your money grow and reap the benefits in long run.