In today’s situation the financial market is not really steady. Investing in a volatile market even in the diversified mutual funds carry some risk. One method to dilute the risk is to invest through SIP. SIP is the acronym for Systematic Investment Plan. Through this SIP, the investment is not made at one go, but monthly or at regular intervals for a regular amount. By investing regularly with some intervals, the market volatility is tackled. Another benefit of saving through SIP is that it makes the investor disciplined in saving and over a long period of time, it is possible to earn good returns by making small investments monthly. Investing through SIP does not require huge money to be put in at one time and lot of people from salaried class find it possible to benefit from this kind of investment.
The tenure for investing might vary according to the scheme the investor chooses. The minimum period is around twelve months. Because of the concept of investing same without regard to market conditions, the investments have the possibility of averaging out. When the prices are low, more units are bought and when prices are high, lesser units are bought. When investing in mutual funds through SIP, it is possible to invest in both growth plans and dividend plans. One other benefit of saving through the method of monthly payments is the possibility it offers to test the field of play without risking too much and to build a stronger portfolio. As this method does not involve any lump sum, the liquidity of the investor is not affected. Anytime is a good time to begin saving on mutual funds through the Systematic Investment Plan. All of the fund houses and mutual fund companies permit investing through SIP and this is the best option to invest safely and easily.