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Important Points To Remember When You Are About To Invest In Sip

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By Author: Jignesh Shah
Total Articles: 12
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In this post, you will know the mandatory points that should be remembered while investing in mutual funds through SIP. The article describes how to invest in sip. What is the prime motive behind investing in such schemes and related pointers are discussed below for your consideration. Read further to know more.

Many middle class families prefer to invest in mutual funds through SIP, as it helps to establish disciplined and regular saving habits, which are beneficial for them in a long run. Through SIP, the investors can invest in long-term mutual funds for wealth creation.

Here are some important points to remember when you are planning to invest in SIP.

Rupee cost averaging
As SIPs are helpful in averaging the cost return ratio, thereby, gives a chance to the investors to garner more units of shares at lower prices and invest a large amount of money at once. It is beneficial against the volatile nature of market.

Compounding
The investors fetch large corpus to achieve long-term financial goals by investing a small amount at regular intervals. Hence, it fetches good results and gets you better returns when the money is invested for a longer period of time.

Pocket-friendly
The minimum amount to be invested through SIP is Rs. 500, which is not at all a huge amount. Thus, it does not put burden on the budget of the investor. Besides, it fetches substantial returns.

Automatic payments through ECS
SIP automated payments enable the users to not to forget about making investments on time. Every month the set amount will be deducted from the bank account of the investor through ECS. Hence, there is no chance of missing payment.

Emergency funds
With easy withdrawal scheme, you can withdraw money any time. This fund can be used to meet any emergency be it medical accidents, illness, or any such case, which require immediate money. This savings can be used at time of emergency as an emergency fund.

Excludes the need of timing the market
You do not need to worry about the performance of the market, be it volatile or stable, whether it is performing good or bad. The fund performance will even out things even in case of lows and highs. Thus, it ensures that you can get good returns even if the market is fluctuating.

Hence, select the best fund available and keep these points in mind before you choose any sip to make an investment.

The author of the article is known to have a great knowledge about the mutual funds, sip, market and other such schemes. Here the writer has discussed about how to invest in sip.

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