SIP – Systematic Investment Plan is a disciplined way of investing wherein a fixed amount of money is invested at a fixed interval. You decide the amount, the SIP date and the schemes in which you wish to invest. One can plan different life goals be it such as children’s future, retirement, international holiday, holiday home, etc.
Is SIP a mutual fund?
People perceive that SIP is either a mutual fund or different than a mutual fund. However, the fact is that SIP is a style of investment and not a fund/scheme or a stock or an investment avenue. It is a vehicle to invest periodically in a fund/scheme of your choice.
What are the benefits of SIP?
SIP instills discipline as it is route which helps you invest a particular amount on a regular basis. A fixed amount gets invested automatically at a fixed interval. One doesn’t need to spend time on a regular basis to put the money to work.
You can start small and there is no need to have a lot of money to start a SIP. A SIP of even Rs. 3000 per month is sufficient to start with. And then depending on the goals and aspirations, one can increase the amount.
With SIP, you don’t need to worry about timing the markets. Just stay invested irrespective of the market conditions. In doing so, you end up getting more units when the price is low and fewer units when the price is high. This in turn leads to a lower average cost per unit over time which is also called as rupee cost averaging.
Enjoy power of compounding: With SIP, one can stay invested for a longer period of time. Over time as your investment generates returns, the returns get added to the principal amount and this in turn generates more returns. This process gets repeated leading to a big corpus. That’s how the magic of compounding works.
What is the meaning of lock in period in SIP?
A lock-in period is a specified period during which an investor is restricted from selling SIP units. During the lock-in period, you can’t withdraw or switch the units from investments.
At Maindarkar Stock Merchant the Lock In Period is of 1 years.You can continue with your SIP plan by filling new form.