WHY SHOULD YOU INVEST THROUGH SIP (Systematic Investment Plan)?

SIP

There are so many goals to achieve in life, for which a large amount of money is required. Systematic Investment Plan is the solution, it helps us in achieving our various life goals, systematically.

WHAT IS AN SIP?

Systematic Investment Plan (SIP) is the technique of investing in mutual funds through small, periodic installments.

An investor can invest small sums of money monthly, as a contribution towards his goals, and have the required corpus created at the time of accomplishment of goals.

SIP is a simple, smart & time tested method to achieve financial goals.

SIP is a Disciplined approach to investing

Benefit from Rupee Cost of Averaging & Power of Compounding

Benefit from the Time Value of Money. A lumpsum amount invested at the beginning of the year has more value than the same amount being invested in installments over a later period of time

The investor need not time the market

Since a small amount of money is invested each month, SIP is a convenient mode of investing.

Power of Compounding: 

Compounding investment earnings can turn your small investments into a whopping sum after a period of time. The best way to take advantage of compounding is to start saving and investing wisely as early as possible.

WHY SHOULD YOU INVEST THROUGH SIP (Systematic Investment Plan)?

SIP is considered to be the best way of achieving financial goals because of the two Brahmastras it possesses: 

Power of Compounding:

Assuming a rate of return of 15%, what would be the value of 1 after

5 yrs  2

10 yrs 4

15 yrs 8

30 yrs 64

Therefore, the thumb rule to benefit from the power of compounding is to START EARLY. Give maximum time to your investment to get the most out of the 'POWER OF COMPOUNDING'

Rupee Cost of Averaging: 

With SIP, the investor gets more units when the price falls and less when

price rises. At the end of the day, the cost per unit is averaged out.

Month	Nav	Mr. SIP investor		Mr. One Time investor
		Amount Invested	Units Bought	Amount Invested	Units Bought
1	10	1000	100.00	4000	400
2	8	1000	125.00	0	0
3	9	1000	111.11	0	0
4	11	1000	90.91	0	0
Total Units Accumulated		427.02		400
Value of Investment		4697.22 @ NAV rs.11		4400.00 @ NAV rs.11
Avg. Price/unit		9.36		10

GIVE TIME TO YOUR INVESTMENT RATHER THAN TIMING AND BENEFIT FROM THE

'POWER OF COMPOUNDING'

The above example is merely an illustration to explain the benefit of investing at an early age. Returns are assumed at 15% CAGR. Assumed that SIP investments are done regularly every month. No guarantee or assurance of return is being offered by any mutual fund or Distributor. The actual result may vary from depicted results depending on the scheme selected.

Disclaimer: The figures/projections are for illustrative purposes only. The situations/results may or may not materialize in future. Mutual Fund investments are subject to market risk, Read all scheme related documents carefully. Past performance may or may not be repeated in future.