The tough times that we have experienced lately during the global pandemic have made most of us realize the importance of setting up financial goals. Recently, the internet has been flooded with financial gurus advising to build emergency funds and start investing.
As we all know, the current war situation is creating turbulence in the stock market; suggestions are floating all around that it is the right time to invest. Though the famous disclaimer has been etched in our memory that joins the word ‘investment’ to ‘market risk.’ A simplistic definition in a layman’s mind is that mutual funds are risky. You will lose your hard-earned money. Market fluctuations are apparent, but you should look at the bigger picture.
SEBI-regulated mutual funds are reliable enough to put your savings. You can choose the best mutual fund for lumpsum investment or top SIP Plans to begin your investment journey.
You don’t have to know everything about the stock market. Even with zero knowledge of investing and trading, you can invest through top SIP plans.
Now, what is SIP, how will it grow your money, what about the taxes, where to invest, and how long you have to invest are some of the questions that pop up in mind. Let us help you find the answers and figure out how to create wealth with SIPs.
The complete form of SIP is a Systematic Investment Plan. As the name suggests, you will have an investment plan that is systematic. It is more like putting money in the piggy bank, but for SIP, you decide a fixed date and a tenure for which you have to travel around the investment horizon.
You set a target and meet the financial goal with systematic investments that can be done monthly, quarterly, or annually.
SIP allows you to invest in mutual funds. You purchase some units of your favorite fund and keep increasing the investment amount in a periodic fashion. When the investment tenure is completed, you get a return on investment to create your wealth.
Investments are impacted by market volatility. The average return on SIP depends on the mutual fund you select. There are various types of mutual funds, such as large-cap, mid cap and small cap. Large cap funds are less volatile as compared to mid-cap funds, whereas small cap funds are highly volatile. Based on the volatility, the return may vary. However, you can expect anywhere between 14% to 18% return on your investment through SIP, which is way higher than FD and RD.
To start SIP, you need to begin by establishing your financial goals. There can be short term goals like buying a car or buying a new phone and mid-term goals like education or travel expenses and long-term goals like buying a house. Depending on the goal, you can determine the tenure for the investment and begin searching for top SIP plans.
Indeed, it is challenging to find the best plan to invest in. If you don’t have time for market research or are not sure about your knowledge domain, you can contact the investment experts. These professionals have in-depth knowledge about the market and can guide you to find a suitable choice. Ideally, you need to look at the best performing mutual funds in India in the last 10 years to consider a safer choice for investments.
To begin investing in your choice of SIP, you can either open a Demat account or invest via your bank account. Trading becomes simple and more profitable when done independently through a Demat account. Complete your KYC, make sure all the documents are verified and then you are good to go.
Now that you are impressed with the endless benefits of SIP, the next thing you probably want to know is the mutual fund’s name to start your investment journey. To select the best performing mutual funds, you need to know about different categories. For instance, Flexi cap, large and mid-cap, debt-based, equity-based, etc. It is a topic of long discussion, and you might feel overwhelmed by knowing about every category of debt and equity-based mutual funds. Therefore, it is best to discuss it with a professional and find out about India’. When choosing a mutual fund, you have to consider various attributes like NAV and CAGR. What these terms stand for and how to calculate them requires in-depth financial knowledge. It’s better to leave it to the experts.
SIP allows you to save and invest money in a disciplined manner. With a small amount of Rs 500, you can reap higher returns and meet your long-term financial goals. To learn more about the SIP process and top mutual funds for SIP, you can have a word with trusted stock brokers.
