Investment in the stock market is one of the best options to earn additional income to safeguard your future. While choosing a stock an investor should always analyze the risk appetite, investment horizon and ultimate financial goal. Hence, choosing mutual funds helps you to lower the risk and diversify your investment portfolio.
Mutual Funds allows an investor to start the investment with just Rs.500 per month through SIP. Investing in mutual funds through SIP offers you several benefits and in this blog we’ll be discussing what is SIP and 5 important benefits of SIP!
WHAT IS A SIP?
Systematic Investment plan (SIP) is a type of investment method that allows an investor to invest a fixed amount at regular intervals in an investment scheme. When an investor decides to pay an installment amount through SIP, a fixed amount is debited from the investors account based on the scheme chosen by the investor and would be transferred to the scheme instantly which they have invested in.
BENEFITS OF SIP:
- IMPLANT THE DISCIPLINE OF INVESTING REGULARLY:
SIP investments are made at regular intervals on a predetermined day. As mentioned earlier, the SIP amount is automatically debited from the investor’s account and the fund is invested in the scheme chosen by the investor. This disciplinary approach of regular investment helps the investor to be free from actively tracking the market.
When you choose to invest in mutual funds through SIP, you’re experiencing a hassle-free process. All an investor needs to do is to enable auto-debits from their respective bank accounts.
- RUPEE COST AVERAGING:
Rupee cost averaging helps an investor beat market fluctuations and also helps the investment to be averse to the market volatility. If the stock price hits the bottom, SIP allocates an investor more units, and allocates fewer units when the stock price surges higher.
- COMPOUNDING POWER:
The term compounding power refers to earning profit by investing your profits. As an investor if you dream to make the most out of compounding in mutual funds, you should start investing early and must prefer to invest for a long-term.
- BUY MORE STOCKS IN SMALL QUANTITIES:
Investors would require a large surplus to purchase individual stocks in order to diversify their investment portfolio. However, when you choose to invest in mutual funds you can own these stocks in small quantities with just a few thousand rupees.
CHOOSE TO INVEST IN MUTUAL FUNDS:
SIP can be a good way to start your investments in mutual funds. Choosing mutual funds not only inculcates the discipline of savings but also offers the investment a chance to grow in the long-term. Hence, investing your valuable savings in the mutual fund stocks can reduce the risk exposure and also allows the investor to diversify the investment portfolio.
If you’re willing to invest in mutual funds and you’re in search of the best market expert, then it’s time to meet Goodwill. Goodwill is one of the best brokerage firms in India that offers expert strategies to its valuable investors at the lowest brokerage fee. Backed by Goodwill experts, you will be benefit with exceptional customer support, demo trading platform and live training sessions. Click here to Open your free DEMAT Account with Goodwill today!
For more info, visit the official website of Goodwill or make a call on +91 80122 78000 to trade your stocks smartly and efficiently. Stay connected with Goodwill’s Facebook Page and get instant live updates on your stocks.