SIP (Systematic Investment Plan), Investing in Mutual Funds
SIP is a investment scheme in mutual funds. Open ended mutual funds offer SIP, through which one can invest a certain amount monthly, quarterly or yearly. Unlike closed ended mutual funds, it is never ending fund which is open for entry and exit any time. It is a disciplined investment approach to compound your earning in a long term. Benefits of SIP Creates the Habit and Discipline of Investing Regularly Power of Compounding Convenience of Buying and Selling Helps Investor Stay in Control and Ride Volatility Light on the Wallet Compared to Lump-Sum Investment What not to do in SIP? 1. Set a realistic goal based on your age, how long and how much can you invest. You can use SIP calculator to know your expected return. Don't expect beyond the reality. 2. Investment in SIP is never for Short term. At least 10 years should be the time frame to see the effect of SIP. If you wanna invest for short term share market, debentures may be other options. 3. Don't set high ...