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How Would You Find The Best Sip To Invest Now?

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By Author: Jignesh Shah
Total Articles: 12
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SIP stands for systematic investment plan. It is a disciplined way of investing every month and you can start your SIP with a small amount. Even though you have invested in the highest performing mutual fund it might not be giving you the best results when invested in an SIP. This is because the performance of mutual funds depends on ranking and returns earned by the SIP as a collective. Investment on SIP is very simple, and you just need to decide the investment amount, frequency of investment and open your SIP account online.

How to choose the best SIP?

Probably one of the most important factors in choosing the best sip is the money you are willing to invest. Different SIP’s have different growth plan and rates to meet the investor’s interest from a long term as well as short term perspective. To procure best returns, you can go for the long term SIPs and you can also choose the best rated SIPs in the online platforms.

Comparison
How a mutual fund is performing cannot be measured on its own results. It needs to be analyzed along with similar performing SIP’s on a benchmark index and then reached a conclusion whether it is successful or not. The categorization of stocks should be done in a right way, for example mid cap fund cannot be compared with large cap fund as they have different parameters in each category.

Risk
Usually it is believed that the higher the risk the higher the return. Risk can be calculated by Sharpe Ratio which shows the excessive return earned on stocks in ratio to standard deviation of the stock which is the risk. This can be used to make investment decisions for different investors on basis of their risk appetite.

Portfolio Management
It is believed that the higher the portfolio turnover rate the higher the volatility. It is very important to keep a track of the mutual funds you have invested in via SIP.

After analyzing all these parameters such as risk, returns, costs, portfolio diversification, capital markets, historical data and other factors the consumer should select the SIP which matches its risk appetite and financial goals.

The author is an avid investor in the stock market and has great knowledge and experience from working in a stock broking firm for last 10 years. He is now running his own blog about financial issues and here he explains the best SIP to invest now.

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