SIP Strategy: How your SIP investment may be double, quadruple? Know important tips
Mutual Funds SIP Strategy: Mutual funds are a safer option to market exposure than stock investment. Since, it is market-linked, a good strategy, including long-term horizon and top-up can help you build a large corpus. Not just that, if you invest smartly, you money can grow two times or four times.
Mutual Funds SIP Strategy: Despite being market-linked, mutual funds are a popular investment option today. Investors can invest through the systematic investment plan (SIP) or lump sum in mutual funds. SIP has become a more popular option between the two since one doesn't need to time market, can invest with a small amount, and get the benefit of rupee-cost averaging. SIP in the long run are known to give much higher returns than the guaranteed return schemes. However, such a high return also depends on one's selection of mutual funds. If you have also decided to invest in mutual funds through SIP, keep these 4 things in mind. These strategies may help you double and quadruple your investments.
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Invest for the long term
If you want to create wealth through SIP, start SIP for a long term i.e. 15, 20, 25 years or even more. The longer you stay in SIP investment, the bigger corpus you can build.
Invest for the long term
Even by investing a small amount every month, you can create a fund worth crores through SIP. Specially after 15 years, your investments grow faster.
Be disciplined about investing
You have to be disciplined in terms of investment. It means that if you have started investing once, continue it. A lot of investors invest when the market is rising and the rate of their net assets value (NAV) is going up, but when it slips, they top investing.
Be disciplined about investing
SIP provides rupee cost averaging, so one should continue their SIP even when the market is going down. Once the market recovers, they will also recover their losses.
Do not start SIP of very large amount
If you are starting an SIP for a long time, do not start it with a very large amount. The reason for this is that sometimes due to some circumstances in life or financial crunches, people are not able to continue SIP of a large amount.
Do not start SIP of very large amount
In such a situation, they stop their SIP midway and don't get desired returns. If you feel that you can invest more money in it, then you can start a new SIP. The good thing about it that you can run any number of SIPs and decide its tenure as per your choice.
Top up SIP
Another better way to accumulate a large corpus through SIP is to keep increasing the amount with which, you have started the SIP by a little bit every year.
Top up SIP
If you top up your SIP every year at the rate of 10 per cent or even 5 per cent, you get tremendous benefits and your money can double and quadruple rapidly.
(Disclaimer: Mutual fund investments are subject to market risk. Do your own due diligence before investing in mutual funds.)