Systematic Investment Planning or SIP, you must have heard the term. Also, you must have seen investment advisors and consultants praising it a lot.
What is so unique about it? What makes it the best way if you want to create a good corpus of funds with ease?
Well, here are top three qualities that stand it apart.
It neutralizes the effects of market volatility
Experts say that the only investment method that has given outstanding returns consistently is SIP.
We have seen a dramatic change in the stock market index during the last three decades. Since the market is always moving, there is no ‘right time’ where you invest at the lows and book profits at the highs.
Here comes the utility of SIP where you keep on investing irrespective of the stock market index. Since a constant amount is invested over a long period, you get the cumulative benefit.
When the market is bearish, you accumulate more units in the same money and reduce the average purchase cost.
When the market is bullish, you get more value for the units.
SIP makes you a disciplined investor
It is a fact that we always keep investment as the last priority item. Experts say that consistency and discipline are the two crucial aspects of investment.
Systematic investment planning makes it possible. When you invest using SIP, the predefined amount is invested in the fund automatically.
Nowadays, it is possible to give standing instruction to debit the amount from your bank account directly. Thus, there is no chance of missing it for a single month.
If the investor has any doubts or needs clarification about SIP, then he can contact investment consultants for the same.
Iplan is a reputed and renowned investment consultant where complete guidance is provided to investors.
SIP offers a wide variety of choices
All the sectors do not perform outstandingly in the stock market. Sometimes IT and Infrastructure outperform and sometimes realty sector and banking sectors reach incredible heights.
Hence, your investment should also change accordingly. When you invest through SIP, it is possible to switch the funds as per market conditions.
Based on your needs you can change the investment options and keep on increasing the fund value.
SIP gives immense flexibility to the investors.
In short, SIP gives the benefits of stock market investment without exposing to the risks of it. No wonder it is the most sought investment mode today!