Often we come with this question, why to invest systematically i.e. every month? Why not to time the market?

Well, answer is simple. What is my priority? Should I wait for an ideal time to enter the market or should I start from where am I? Remember, your goal is more important than any other factor. And goal doesn’t wait for ideal market situation. SIP helps you average every market situation and also helps you catch the long term market trend.

At every market level, there is an opportunity to invest. While we focus on our goal, we give fund manager the responsibility of creating a portfolio best suitable for current market scenario. Now the question comes about which fund to select? There are no simple answers here. Multiple factors affect your fund selection process, like:

What is your goal?
How long are you planning to invest?
What is your risk appetite? (I.e. will you start panicking if your portfolio gets into red?)
Following are the major advantages of a Mutual Fund SIP

  1. Discipline: Remember, saving is a discipline. The first advantage of an SIP is creating the habit of saving regularly. ‘Pay yourself first’ concept of financial planning applies best here. It means you are saving for your future before you start spending. It deducts a fixed amount at the regular interval from your bank account and invests in the fund of your choice.
  2. Flexibility: Best part of SIP investment is you can start small. A small amount like Rs. 500/- is enough to start the journey for a beginner. Once the habit of saving is formed, SIP amount can be increased. Also there are no hard and fast compulsion to invest, one can decrease or stop his/her SIP if that becomes a burden.
  3. Averaging: When NAV of the fund is low, one get more units & vice a versa when NAV is high one gets less units. Thus one gets the benefit of rupee cost averaging.
  4. Market Timing: Its saves you from the burden of timing the market. Every month you invest systematically fix amount on the same date. This helps you to invest at every level of the market.

To know more & start your SIP in Mutual Fund you can call me on +91-9879956949 or mail your query at hardik@niveshplanner.com.