Women have established themselves over the years as dominant individuals who are no less in giving men tough competition irrespective of the field. But when it comes to investing, they are a bit sceptical about putting their hard-earned money into an investment scheme. In fact, women are naturally inclined towards money management and saving. But for some reason, they just do not want to take any risk with their finances. However, what they do not realize is that the capital that they are saving now, may not be capable enough in future to give the financial stability they deserve. When you own capital, there is always some risk associated with it. Also, inflation may eat up all your savings as the prices of fuel, basic necessities, house rent, etc. are constantly on the rise.

With old age comes medical expenses and if you do not have a decent health plan, medical expenses can also burn a hole in your pocket. Instead of depending on anyone or hoping that someone will lend you a helping hand in future, why not build a corpus that may be able to give you financial stability and sustainability?

In order to build a decent corpus for future financial stability, women need to start investing. The early you start the better it is. Because if you are looking forward to accumulating wealth through investing, you need to have a long term investment horizon. This way, if you start early you will have more years in hand before you retire and hence, and in the long run your savings might grow into a commendable corpus.

Mutual funds have been gaining traction in India over the past few years. Several investors are giving mutual fund investments a try to fulfil their short term and long term investment goals. Mutual funds are supposed to give investors an opportunity to invest in multiple markets through one single investment. This is why it is believed that mutual funds may also offer some diversification to an individual’s investment portfolio.

What are mutual funds?

Working women who carry some risk appetite and are willing to invest in market linked schemes with the hope of earning some capital appreciation in future may take a look at mutual funds. What AMCs and fund houses do is that they collect money from investors sharing a common investment objective, and invest this pool of funds across the Indian and foreign economy. A mutual fund scheme invests in money market instruments depending on its risk profile and investment objective. The money is spread across multiple asset classes like equity, debt, government securities, corporate bonds, certificate of deposits, etc. The performance of a mutual fund scheme may depend on the performance of these underlying asset classes in which it invests.

What is SIP? Can it help working women in achieving future financial stability?

A Systematic Investment Plan or SIP has become so synonymous with mutual funds that people often confuse the two being the same. However, this isn’t true at all. Working women seeking investment in mutual funds will have two investment options to choose from. They can either do a lumpsum investment in an XYZ scheme or opt for a mutual fund SIP. SIP is a method to invest in mutual funds. SIPs generally work in favour of those retail investors who wish to invest small amounts at systematic intervals rather than making a lumpsum investment right at the beginning of the investment cycle.

With SIP of monthly frequency, all women investors have to do is instruct their bank, following which every month on a fixed date, a predetermined amount will be debited from their savings account and electronically credited to the mutual fund. A Systematic Investment Plan might actually be able to inculcate the discipline of saving in an individual. Because when you give permission for auto-debit, a fixed amount gets deducted every month, thus freeing investors from the hassles of making manual payments.  SIP is also known for helping investors with a long term investor horizon get closer to their ultimate financial goal. When you have a long term investment horizon and the wish to keep investing systematically without breaking the loop, it might work in your favour and even help you in accumulating wealth. Also, those who plan to remain invested in mutual funds for the long run stand a chance of benefiting from the power of compounding. When you invest in mutual funds through SIP, every month you are allotted a certain number of units depending on your SIP amount and depending on the fund’s existing NAV. When the NAV is low, investors are allotted more units. Similary if the NAV of a fund is on the higher side, investors are allotted lesser units. This is referred to as rupee cost averaging and is something that only SIP investors can benefit from.

Women have left no stone unturned in showing the world what they are capable of. Then why not do that same through smart investing and help themselves secure their future through systematic and regular investing in mutual funds through SIP?

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.