What is SIP?
In other words, SIP is a mechanism to invest your monthly recurring savings into mutual funds. But of course it is not the only mechanism.
FAQ
2. Start early with your SIP Investment Plan- This is a very important step. Suppose if you are looking to build a retirement corpus with your mutual fund then starting early is extremely important. The earlier you start, the more time you give your investment to compound. And compounding is simply awesome. Compounding basically means investing back the returns generated by an investment. This return generated is added back to the principal and then investment generates further returns on the enhanced principal. This is a very powerful concept and can overtime turn even small sums into very large sums of money.
3. Select the best mutual funds for your SIP investment plan- It is quite obvious that it is important to select the best mutual funds for your SIP investment Plan as if you select the best mutual funds, you will get the best returns. But most of the people are selecting wrong mutual funds for themselves just by viewing star ratings on interne5 which is wrong method to select mutual funds.
Following are the criteria/framework which you need to follow while selecting for mutual funds-
-Segregation of funds into proper baskets before starting the comparisons.
-Compare funds across many different timelines and not just one.
-Doesn’t just compare returns but also takes risk to accounts the risk that you would expose yourself to if for the returns.
-Recent performance of mutual funds in the market.
-Focuses also on subjective parameters like fund manager reputation, AUm of the fund scheme and how the funds has done during stressful periods like 2008.
4.Keep your Portfolio Optimized- the funds you select would not be the best funds forever, so make sure that you invest in the best mutual funds.
5.Apply Intelligence- Intelligence applying can be a real game changer for your investments.