MUTUAL FUNDS

Systematic Investment Plan (SIP) – Best way to invest

Invest in mutual funds through SIP or learn about advantages of investing through SIP

* Invest in small amounts regularly

* Opt for monthly auto-payment

* No worries about market ups & downs

* Plan budget and expenses better

What is SIP?

Systematic Investment Plan, commonly referred to as an SIP, allows you to invest regularly a fixed sum in your favorite mutual fund scheme/s. In SIP, a fixed amount is deducted from your savings account every month and directed towards the mutual fund you choose to invest in.

KEY TAKEAWAYS


Power of Compounding

  • The basic principle of Compound interest implies that small amounts invested over a long period of time would result in a larger return compared to a one-time investment .

Start with just Rs 500

  • You can start investing in mutual funds through an SIP with amount as low as Rs 500 and still not feel a burden on your budget planning. Generally, over a period of time you can increase your monthly installments by a factor of 15%.

Rupee Cost Averaging

  • The equity market is volatile in nature and when you do an SIP investment, you would be buying more number of units during a slump and less number of units in a blooming market and as a result you would decrease the cost per unit.

Become a disciplined investor

  • An SIP investment would make you more disciplined in matters of managing your finances. With the option of automated payments, it means you don’t have to remember every month.

Acts as an Emergency Fund

  • With One-click withdrawal SIP can act as an emergency fund for possible contingencies (like medical crisis or job loss) puts your mind at ease.

How do Equity Funds work?


Equity mutual funds invest at least 60% of their assets in equity shares of numerous companies in suitable proportions. The asset allocation will be in line with the investment objective. The asset allocation can be made purely in stocks of large-cap, mid-cap, or small-cap companies, depending on the market conditions. The investing style may be value-oriented or growth-oriented. After allocating a significant portion towards the equity segment, the remaining amount may go into debt and money market instruments. This is to take care of sudden redemption requests as well as bring down the risk level to some extent. The fund manager makes buying or selling decisions to take advantage of the changing market movements and reap maximum returns.

Who should Invest in Equity Funds?

  • Your decision to invest in equity funds must be in sync with your risk profile, investment horizon, and objectives. Generally, if you have a long-term goal (say, five years or more), then it is better to invest in equity funds. It will also give the fund much needed time to combat market fluctuations.

a. For budding investors

  • If you are an aspiring investor who wants to have exposure to the stock market, then large-cap equity funds may be the right choice. These funds invest in equity shares of the top-performing companies whose risk level is low. The well-established companies have historically delivered stable returns over a long period.

b. For market savvy investors

  • If you are well-versed with the market pulse and willing to take calculated risks, then you may think of investing in diversified equity funds. These invest in shares of companies across all market capitalisations. These funds provide an excellent combination of high returns at lower risk as compared to equity funds that only invest in small-cap/mid-caps.

Benefits of Investing in Equity Funds

The benefits of investing in mutual funds are

  • Expert money management

  • Low Cost

  • Convenience

  • Diversification

  • Systematic investments

  • Flexibility

  • Liquidity

The primary benefit of investing in equity funds is that you don’t need to worry about choosing stocks and sectors to invest. Successful equity investing requires a lot of research and knowledge. You need to understand and analyse the performance of a company before you decide to invest. You also need to have an understanding of how a particular sector is expected to perform in the future. Of course, all of this requires a lot of time and effort, which most individuals don’t have. Hence, the solution is to leave the stock-picking to an expert fund manager by investing in an equity mutual fund.

SIP CALCULATOR

18008896837

info@lmvinvestmentservices.com

Mon - Sat 9.00 AM - 6.30 PM

Sunday Closed

BEGUMPET

Hyderabad, Telangana,500016