The systematic investment plan is the hassle free and available to all option for making the money of the people generating wealth in straightforward and easy steps. SIP is the mutual investment scheme where an investor is required to pay a certain amount of money to the professional mutual fund investment company that invests the mutually collected money from different small investors and distribute their part of the profit to each investor. The best feature of SIP is that investor does not require paying the full amount but needing to pay the instalment after the particular time interval.
How does SIP help to build wealth
The mutual fund investment market is trying to attract the retail investors from the Indian market, who holds enormous capital in a minimal amount but due to not availability of the safe and attractive product, a market was unable to catch the retail investors from very long time. With the development of the market, the product called SIP has come into existence twenty years back by Franklin Templeton. By the time, mutual fund to SIP has been proven to be the best option for the small investors, who want to make their money profit. But does not have any idea about the insights of the market and are engaged in some other works. Retail investors have been benefited from SIP investment in a real sense. SIP helps to create and increase your wealth in excellent ways. Some of the advantages and characteristics of investing in MF SIP are given bellow:
- SIP avoid market irrelevancy: This is the greatest and risk mitigating feature of SIP. In SIP, People are required to invest their money in the small amount after a particular time interval. The effect of the time will be only on the money which you have invested in the market at an appropriate time if there is any loss at that time and the later, market goes up than the money spent later will cover the losses made in the past. So we can say that it helps to mitigate the time risk of investment.
- Engages retail investors: SIP contributes to the small or retail people to make their money grow in the market of the mutual fund. SIP does not ask people to invest a big amount in the market at one time, but it is the investment plan where people are required to invest in the market in a tiny amount at a regular interval. With this feature, the people who do not have the significant amount at one time can also increase their wealth in future by investing the small sum of money.
- Professional and disciplined approach to investment: Sometimes, people have money on invest in the market but does not have the idea about how to investments in the market or how to look after to purchase or sell their stocks. SIP has eliminated this boundary also from the retail investor’s pathway. All trading activities of the SIP mutual fund are handled by the professional and experienced managers, how to have complete information about the market and keep on checking the market activities on a regular basis.
- Flexibility: Unlike other investment options, Mutual Fund SIP does not have a limit or restriction of how much to be invested. A person can start SIP as lower as 500 monthly as or even less than this. Retail investors have been given full freedom to set their level of investment on monthly, weekly, yearly basis.
- Transparency: Mutual fund SIP investment provides full transparency to the smart investors if you have the knowledge about how to trade than you can have a spy eye on your investment and take your decision of investment option based on your risk profile, a track record of the stock, investment objective.
Another great feature that is available online today are SIP calculators. Trusted sites provide SIP calculation tools that make the calculations involved hassle-free. SIP mutual fund is the easiest way to start your investment profile. It helps the retail investors to increase and create wealth for their future without taking any hassle on their shoulder.