Are you finding the way get maximum returns on your mutual fund investment. Here are the best tips to achieve maximum return through SIP.

Systematic Investment Plan (SIP) is an easy way to make a disciplined investment through a mutual fund. Through which long term targets like buying a house, studying children, and their marriage can be achieved. Compounding power is EVP and helpful in that. But in order to achieve maximum return we have to keep in mind some detailed information.

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Like other investment options, you must do some preparation when doing a mutual fund SIP.

Here are the best key tips. Which will help you to create a big fund through SIP.

Best Way to Build Long Term Wealth in Mutual Fund SIP

Determine the appropriate amount of SIP

Before you start saving through SIP, look at how much it will cost for the goal you are investing in, and how much time you have. Make sure that you can accurately estimate the amount of SIP based on two things. If the SIP is issued in advance and needs to be increased to achieve the target, check how much savings will be required each month to increase the amount.

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Choose Less, But Better Funds

Instead of buying many mutual fund schemes, one should invest in the right choice of dress. Ensure that there is no difference between sectors and market cap. Some useful mutual fund schemes with appropriate diversification will be useful in the long run in preparing mutual funds for the long term. Over time, instead of buying a new mutual fund scheme, you can invest an additional lump sum in the folio of a previously issued mutual fund scheme.

Build a Goal Based Portfolio for Future Prospect

You can build your own goal based portfolio with the best management and goals in mind. You can create a separate portfolio to achieve a goal like your retirement planning, tour planning, children’s study and many more. SIP funds can be determined for it. As well as create a separate portfolio for retirement. Remember, equity works well with an asset class. In this regard, SIP in equity mutual funds can be a good decision for the long term.

Consider Age and Risk

Invest in Spectrum to Large Cap to Mid and Small Cap Funds depending on your age and ability to take risks. Try to have variety in the portfolio. But do not choose a scheme based on current performance. Choose schemes that consistently perform well in the long term. Have overtaken the benchmark for most of the term. Remember, the younger you are, the more risk-taking you will have. It will continue to decrease with age,

Set an appropriate date for the SIP

Usually 1st or 2nd of the month is chosen for SIP. But you can choose the right date according to your convenience. The date on which your salary is due. Choose a date a day or two later. Most of us have more than one bank account. So make sure that you have sufficient balance whenever you approach the date of withdrawal of SIP from your bank account.

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What are the Benefits of SIP?

Always remember, when it comes to Mutual Fund SIP, you must have a systematic approach to everything!

Freedom from market timing

Since you’re required to invest at regular intervals, you’ll now not be fearful about timing the market.

Power of compounding

It helps in wealth generation by including the earnings generated into the principal investment amount and reinvesting the same. This attribute accelerates the profit generation and lets you build a corpus quicker.

Disciplined investment method

SIP requires you to invest frequently into profitable funds. In turn, it not solely encourages financial savings but in addition, helps to inculcate a disciplined method in the direction of investments.

Rupee cost averaging

Such a benefit manifests while you purchase extra units whereas the market is low and sell them when the market is thriving. It’s believed that rupee cost averaging lowers the overall cost of investing and in addition wavers off the risk of investing on improper time.

Convenience

You may spend money on a disciplined and phased method by way of a SIP. It provides you the comfort of beginning your investment with as low as Rs 500 a month.

How to Start SIP Investment in India?

You can start your SIP Investment in India with Groww App.  Groww app provides you the comfort of beginning your investment starting with as low as Rs 500 a month.

how to start sip investment in india

Start Your Investing Now !!!

 

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FinFormula was founded by Nikhil in 2020. I am a Investor in the last 4-5 years. I am writing here about Stock broker review, IPO investment, Stock News, Stock Results, Mutual fund, Broker comparison, Crypto Currencies, Technical analysis, Fundamental analysis, Personal Finance, and my experiences.

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