Ultimate Guide for SIP Mutual Fund Investment plans
Friday April 12, 2019,
8 min Read
Every individual has a different life perspective for which he earns, expense and saves for his future. Coming up with the right Mutual fund investment plan will depend on individual choices for sure. But getting the right effective advice from the market professionals will give a whole new projection of the financial security for your future. Each step of your life needs an appropriate idea, guide, information, finances and then planning for it to be successful. Whether it to be your children education planning, their marriage, insurance plan, medical bills, retirement funds, home loans, or any more ambition you might have for life require precise planning to be successful.
So what is the ultimate guide of SIP mutual fund Investment plans. There are also many misconceptions regarding SIP as completely another investment scheme from mutual funds, more riskier, markets tentative, long lock-in periods, lump-sum amounts to invest, penalties, and low returns prevailing in the markets that one needs to avoid. Here is a piece of short information about this SIP Mutual funds with their benefits, how to begin and be on the right side of profits.
This Mutual fund investment guide offers you a chance to understand the need, plan and start your journey in making your future secure. Every investor is a bit worried in the beginning about the assurance of his money with the market being tentative. But one needs to understand the market nature and be patient enough to make money from these circumstances. Investment is must if you have to secure your future. And SIP Mutual fund investment is surely one of the most effective ways to grow your money in the current market trends. But there are again hundreds of funds, different types, companies, assets and companies that offer their SIP.
Choosing and selecting the most appropriate that will benefit you can change life perspective completely. Make sure you take enough to advise and instructions from the experts to come up with the plan for beginning your journey for investing in the market.
Systematic Investment Plan is one of the smartest and sophisticated ways for beginners to get adjusted with the market volatility. These SIP trends are dominating in the Indian markets for the last decade.
A Systematic Investment Plan is way offered by mutual funds to the investors that allow them to invest step by step small amounts on a regular basis rather than a lump-sum amount in one time. So every time you invest in these SIP's there are some units bought against your name at the current prices for adding into your whole account. These choices give users a lot of benefits like ease of investing monthly, tackling market volatility, minimizing risk, and power of compounding. That can grow their investment with better than any saving plans in the market.
Especially for the Indian population which is mostly salary based this option has made it possible for most to get their investment done based on their income rather than in one huge amount. Also every month there are latest NAV prices for units purchased against your investment so the whole prices for buying in the lows and highs evens out often called 'Rupee Cost Averaging'. These SIP's are also further dis-invested in many different funds so the risk is further marginalised to give more confidence to the investors. So it becomes easy for them not to put all their money in one fund rather than multiple SIP funds for gaining benefits from a different corner or losing just from one bad stock.
How to start SIP investment?
Anyone with the right focus for their future in ensuring financial stability and family needs uses SIP to invest in multiple market stocks and funds. There are many companies, funds, corporates and market stocks that allows this sophisticated Step by step investment. There are always a few specific rules one needs to follow and keep in mind before start investing in respective funds.
The minimum amount (from Rs 500 to Rs 1000 per month), lock-in period (6months to 1 year). Past and present records, goodwill, current standing along with their future overview and personal expectations are the things to ensure investors are fully committed towards this investment. Many of these things will depend on the amount of risk one is ready to take, duration and expectations you have from investing in the market. A good financial advisor will debrief you on all the circumstances that might arise in market conditions once you invest in them.
Today bank also offers automatic withdrawal facility from an investor bank account. One just needs to fill the appropriate form for getting specific amount deducted from their personal account towards SIP Investment. Now many banks also give their own SIP and provide easy integration to their personal account for better functioning. Every fund will have some of their specific rules and guidelines that will be attached with the form when signing up for them. Make sure you read all the important instructions to understand how any fund works? The right duration, minimum amount, lock-in period, process of investment, how it grows and when is the most suitable time for taking this investment out from the market. These questions one needs to discuss with their advisors based on their expenses they are going to face in real life.
SIP investment calculator
A calculator helps investors better plan for their investment in various terms like Monthly Saving, duration, the expected rate of return and also one can adjust them as per the inflation. These things vary from individual to individual and economic circumstances surrounding it. At Wealthcare India, these custom calculators are available where one can change all the above-specified values and get the right projection for their investment.
These things offer clients to come up with exact values for some of their needy investment like marriage plan, education plan, retirement plans and many more. The whole projection gives an investor the idea for making a smooth balance between their expenses and saving for handling all financial struggles in their respective life. So when the right time comes up for expenses in life you are ready with assurance and confidence to live a lifestyle of your own.
Power of Compounding
Returns from SIP follows the rule of compounding benefits which results in large wealth creation for the investors. Every year your investment will get some return and this extra amount is again used to invest in the same share again and again which results in huge benefits for investors. Whereas if you go with regular bank fixed deposits or any other saving scheme. largely the returns are the simple interest which hardly covers the inflation rate that increases the commodities price every year. So this compound returns along with benefits separate this SIP investment from the rest. Over the last decade, their returns have been double from the regularly fixed bank schemes another factor that gives SIP more preference.
For example, if you invest a 1,00,000 amount for 5 years in Fixed deposit you will get a return at 8% with simple interest to come at Rs 40,000 whereas the same things, when considered for compound interest, comes at Rs 48,984. There is around Rs 10,000 difference of your investment that one grow from this small saving in different interest. So if the returns are more than 15% than SIP outruns these saving schemes completely.
Many organisations also allow easy customization in increasing or decreasing the SIP amount. Also with well-diversified SIP investors have more assurance and confidence on the stability of the funds rather than investing only in one stock where the loss percentage looms largely over their regular chances. It is also recommended to give your SIP enough time to build large wealth as markets are continuously going up and down these investments more time to transform into large wealth creation. More the duration better you allow the investment to increase its size in the current circumstances. Large wealth creation requires sophisticated planning, discipline and active on the market regular changes along with righteous guidance from financial experts.
With Wealthcare Securities as one of the top assets management companies in the Delhi NCR area, are offered with best sip plans that will cater to your personal needs. Each market changing trends, and different points that might affect your investment are discussed with clients to be on the right side of the change. We understand the markets are volatile and their results are completely changing but using the most sophisticated team of advisor. Wealthcare has made a reputation in the market for working with thousands of clients in transforming their large wealth creation for future.
Online platform for personalized credential is also provided that have all the necessary details of respective accounts. All the important decisions for investment, disinvestment, and advises are also offered online with best financial experts to offer sophisticated communication with a client. They can access their details from around the world anywhere with internet and device. All the legal information, calculators, and process are provided on the platform. These are also secured with the highest encryption available on the internet.