The power of rupee cost averaging:
Through a systematic investment plan (SIP) you can choose to
invest fixed amounts in a mutual fund scheme which
could be as low as Rs500 at regular intervals (like every
month) for a chosen period of time (say for a year).
The amount you invest every month or every quarter
will be used to purchase units of a SIP of a mutual
fund scheme. Small amounts set aside every month
towards well performing SIP mutual fund schemes can
make an investor achieve his financial goals in future.
Invest in instruments that beat Inflation:
Equity investing can help you combat rising inflation
that diminishes the value of your savings.
SIP over a longer period can reduce the cost per unit:
An investment of Rs24,000 in a mutual fund resulted in a value of Rs25,200 after
12 months; whereas a SIP mutual fund investment of
Rs2,000 per month grew to Rs27,095 after the same
period.
Fewer efforts to opt for SIP
The procedure to invest through SIP is easy. All you
need to do is give post-dated cheques or opt for an
auto debit of a specific amount towards SIP from your
bank account. SIP plans are completely flexible. One can
invest for a minimum of six months or for a long tenure.
Also, there is an option of choosing the investment
interval which could be monthly or quarterly.
Abstract: Sharekhan reports