SIP Investment Tips: Know why investing in SIP is important, follow these tips to get more benefits Posted by Jeevan Utsav on October 30, 2021

SIP Investment Tips: Know why investing in SIP is important, follow these tips to get more benefits

Tips for investing in SIP: SIP or Systematic Investment Plan allows an investor to invest a fixed amount regularly in a mutual fund plan, usually an equity mutual fund.

There are many plans these days, where you can invest and not only save your money but also increase that amount. In such a situation, it is very important that you invest in the right place, so that you can accumulate a lot of wealth in the long run. These days people are investing very fast in mutual funds through SIP (Systematic Investment Plan). If you also want to increase your savings amount, then you can invest in SIP. On the other hand, SIP is a better option to secure a better future. Apart from this, it is also an easy way to meet the finance needs. The special thing is that you can save more by investing less amount in SIP plan for long term. Along with this, by making regular investments, you can learn where and when to invest money.

Advantages of Systematic Investment Plan
SIP i.e. Systematic Investment Plan helps you to average your purchase cost and maximize returns. When you invest regularly regardless of market conditions, you will get more units when the market goes down. But when the market is at the top, you will get less units. It averages out the purchase cost of your mutual fund units.

When you invest for the long term and earn returns on the returns earned by your investments, your money starts to flow. It helps you to build a large corpus which helps you to achieve your long term financial goals with regular small investments.

To get the most out of SIP investing, follow these tips to
set a long term goal – SIP works best in volatile markets by taking advantage of rupee cost averaging. The market may not experience all the rotation in the short term. Exiting SIP in this case will not give good returns. Hence, it is always better to devote enough time to your SIP plan, for example, at least 10 to 15 years

Diversification- Try to diversify your investment portfolio. Instead of putting all your money in one mutual fund, split it into other funds. If possible invest in different sectors. For example, even if one sector underperforms, you can still rely on others. Therefore, it is always good to have a varied strategy.

Do not exit in bearish- If you are planning to stop your SIP investments then it is always good to exit when the market is relatively high. Wait for the right time before stopping the SIP. If you close your SIP amidst the tanks of the market then you will miss the chance of getting a good return on investment.


Choose Funds Based on Long Term Performance- This is an important parameter of past performance that you should look at when you plan to choose a mutual fund, which should be studied in the long run. It is difficult to identify mutual funds with only one year on the basis of past performance. A mutual fund that has performed well in the past year may have a long history of under-performing. So it is better to identify a fund on the basis of its performance for at least 4 to 5 years.

Review your fund- You should review your fund at least once in 6 months. This will provide you a clear picture of which funds are performing and which are not. On the other hand, a steady decline in performance indicates that you may need to exit that scheme and invest in some other mutual fund or in a different sector for some time.

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