The returns that equity investments offer have time and again lured customers to invest in them. However, many think of it as a rocky ride and opt for other less risky options. The ones who do get into the game have the required risk taking appetite, expertise and time to track their investment for better prospects. This however does not mean that those who lack all this can't profit from such a lucrative investment. SIPs or Systematic Investment Plans is the answer for many of those who wish to invest in equities but don't have the stomach to digest the ups and downs of the market. Here's why SIP is a great way to invest -
Experts to manage your investment -
SIPs take the stress out of investing in equities. This is best for those who don't want to go through the hassle of monitoring the market or those who don't have the required expertise to do so. This plan employs professionals to manage your investment. They constantly research on the company, the industry and the economy, thus ensuring investment of your money in an informed manner.
Diversity of investment -
The popular saying in the equity market is 'Never put all your eggs in the same basket'. SIP offers you this very advantage. The fund gives you the required diversification and at an affordable cost. Normally, huge funds would be required from an individual who desires a good amount of diversification in his profile. But with SIPs you can invest a small amount each month in your fund and it will be invested appropriately. This reduces the overall impact on the returns from a portfolio due to loss in a certain sector or company.
Market timings become insignificant -
Those who equities are troubled by questions - where to invest and when to invest. While investing in mutual funds solves the problem of where to invest, SIPs handle the dilemma of when to invest. This is disciplined form of investment that does not consider the condition of the market, thus making the timing totally irrelevant.
Affordable investment -
Normally in equities requires you to put in huge amounts to have a well-diversified and sizeable investment. But with SIP you can invest as little as Rs. 500/ 1000 on a regular basis and invest in equities. Investing in such small portions month by month does not hamper your cash flows and gets you good returns as well. It is the best way for a small-time investor to benefit from the equity market.
Source: [http://www.squidoo.com/why-investing-in-sips-is-a-great-idea]
Experts to manage your investment -
SIPs take the stress out of investing in equities. This is best for those who don't want to go through the hassle of monitoring the market or those who don't have the required expertise to do so. This plan employs professionals to manage your investment. They constantly research on the company, the industry and the economy, thus ensuring investment of your money in an informed manner.
Diversity of investment -
The popular saying in the equity market is 'Never put all your eggs in the same basket'. SIP offers you this very advantage. The fund gives you the required diversification and at an affordable cost. Normally, huge funds would be required from an individual who desires a good amount of diversification in his profile. But with SIPs you can invest a small amount each month in your fund and it will be invested appropriately. This reduces the overall impact on the returns from a portfolio due to loss in a certain sector or company.
Market timings become insignificant -
Those who equities are troubled by questions - where to invest and when to invest. While investing in mutual funds solves the problem of where to invest, SIPs handle the dilemma of when to invest. This is disciplined form of investment that does not consider the condition of the market, thus making the timing totally irrelevant.
Affordable investment -
Normally in equities requires you to put in huge amounts to have a well-diversified and sizeable investment. But with SIP you can invest as little as Rs. 500/ 1000 on a regular basis and invest in equities. Investing in such small portions month by month does not hamper your cash flows and gets you good returns as well. It is the best way for a small-time investor to benefit from the equity market.
Source: [http://www.squidoo.com/why-investing-in-sips-is-a-great-idea]
Source...