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Reasons why investing in SIP is the best foot forward

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In the last few years, the number of people who have been investing in share marketing has reported a substantial rise. All those who are investing in stocks happen to invest in an MF calculator. The best part is that the systematic investment plan or SIP has gone on to become popular among investors. Let us have an idea of what is mutual funds and how you intend to invest in the same.

It brings discipline to your savings and investment

People complain that they are not able to save a lot of money. When you opt for this route, you are looking to invest in regular funds that are going to translate into funds. Slowly and steadily, this translates into savings and brings about a degree of financial discipline into your daily life.

Start with a small amount

With SIP you can start with a small amount as low as Rs 500. If you feel that your earnings are not high and your savings are low then you can cash in on the benefit of this method. This is going to provide you with a head start when it comes to your investment goals.

There is no point to stress when it comes to the market timing

A benefit of investing in SIP is that you do not have to stress about the timing of the market and invest accordingly. Once you come across the fact that the stock market is high, with the same amount of money you will be allocated fewer shares and vice versa. So, your average stock and portfolio are expected to be balanced at the end of the day.

You can stop anytime if you want

The majority of the SIPs are not going to levy any fees if you want to stop at any point in time. Just you need to go into the Demat account and opt out of the plan. This is one form of benefit that traditional investments like fixed deposits do not provide.

Cash in on the benefit of compounding

When you are investing in SIP, the monthly investments that you derive from SIP will be reinvested in the sum towards the end of the maturity. So once your investment is exposed to compounding you are bound to avail the power of substantial growth.

Skip if you feel that the funds are tight

In some cases, you may not have sufficient funds in your account to pay the SIP. If this is the case you can do so as the SIP is not going to levy any charges or fees. You can come back and invest again unlike an FD or RD.

To conclude another important aspect of investing in a stock market is not to allow emotions to get the better of you. The stock market is one that continues in a flawless manner. It is suggested that you do not make any impulsive decisions based on the performance of the stock in the market. 5paisa is the one-stop solution for all your investment needs and they are experts to take care of the same.

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