Systematic Investment Plans are known as SIPs. In this plan, an investor invests small sums of money every month into a specified mutual fund. The benefits of this plan are discussed.
Every investor is not of high net worth. It is not possible for everyone to invest lump sum amounts of money.
In this scheme, a common man can get equity exposure through investments of as low as 500 rupees per month. There is no upper ceiling of investment.
In this scheme, an investor gets the benefit of rupee cost averaging. He can buy more units of a fund when the markets are low as he is not investing all corpuses at one time.
He becomes disciplined as a result. A regular investment over a long period of time will not only make him disciplined but will also help him to gather huge amount of wealth by virtue of rupee cost averaging over a long period of time.
His investments will be managed by experienced fund managers and thus he will get the benefit of their expertise.
At present, it is not even important for an investor to go to a fund house and invest directly. He can do all of those at the comfort of home by investing through internet. Almost all fund houses offer this benefit at present.
As per current rules, no entry load will be charged to him.
In an SIP, an investor enjoys the power of compounding. Thus he will be able to gather substantial amount of wealth over a long term.
Thus systematic investment plans are the best way to gain equity exposure even with a limited corpus in case of a mutual fund. The magic of Rupee Cost Averaging is reflected in case of SIPs. So go ahead and invest.
Author: Suddhadeb Chakraborti
Article Source: EzineArticles.com
Provided by: PCB Prototype & Manufacturing
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