Why Should You Invest Through An SIP
Investing in mutual funds has many benefits. Your account is managed by a professional fund manager and you are able to participate in the stock market rally which lets your money grow.
Investing in equities is risky but the returns that this investment offers to you are great. This is why it is highly recommended that some portion of your investment should be inequities.
Mutual fund investments great way to get exposure in the equity market. And the best way to do so is by opting for a SIP or a systematic investment plan.
WhatIs A Systematic Investment Plan Or SIP?
When you wish to invest in a mutual fund scheme you could either choose to invest a lump sum amount of money or choose a SIP. Investing through SIP is hassle free and this lets you invest small amounts of money in regular time intervals. This does not cause any burden to you financially and at the same time, your risk is spread out.
When you invest through the SIP route you have a discipline of saving money and this, in turn, helps you to build wealth.
How Does SIP Work?
The investment through SIP is flexible and easy. The amount gets debited from your account every month or the time period that you choose and this money is used to buy the units of the mutual fund. The unit is purchased on the market rate or that day.
Every time you invest money the units gets allotted to you at the prevailing market rate. This lets the investor average out his investments.
This is highly beneficial in Qprofit because even the experts will never be able to time the exact high and the exact low of the market. But with a SIP investment plan, you buy units, both when the market is at its peak and when the market is at the lows and thus your average buy price is good.
The volatility in the stock market is what makes investors shy away from investing in it. They feel scared and get out of their investments fast. This is because they are unable to time the market properly. But with a SIP this problem is solved. When you invest through a SIP it is not the timing of the market that is important but how long you stay invested in the market is what pays.