What is a SYSTEMATIC INVESTMENT PLAN (SIP) ?
Based on the concept of rupee cost averaging. SIP’s allow an investor to invest a prefixed amount with a scheme at set intervals, and derive the benefit of fluctuating share prices and NAV’s. So, when the share price drops, the investor get more units and when the share price moves up, he gets less. Finally, if the NAV is high, his entire investment is valued at the existing higher level, while his cost of purchase averages out. The following illustration shows how SIP works with an investment of Rs.
A Systematic Investment Plan is perhaps one of the simplest means of investing money in the Share Market. As the name suggests, Systematic Investment Plan, better known as SIP, is a method of investing your money systematically. Moreover, SIP is perhaps also one of the safest means of investing, as SIP investors get better returns compared to a one-time investor. More about NRI SIPs? An investment method wherein the investor invests a particular amount periodically Similar to a conventional recurring deposit, SIP is a method of investing regularly in a mutual fund Allows investor to buy units on a particular date, say 15th, of every month. Investor decides the amount and also mutual fund scheme. Investor doesnt have to worry about declining market as she/he can buy more units with the same capital when the market is falling! Investor automatically becomes a part and parcel, and begins participating, in the market once s/he begins with SIP. SIP ensures rupee cost averaging as periodic l
