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| Easy investing, suitability to most risk profiles and highly professional management make Mutual Funds the most popular investment instruments amongst investors. |
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| Systematic Investment Plan |
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Investing regularly in a SIP (Systematic Investment Plan) allows you to benefit from the phenomenon known as 'Rupee Cost Averaging'. You can benefit no matter how the markets are performing: if the market goes up, the units you own will increase in value and if the market goes down, your next monthly payment will buy more units. Either way, you win.
Power of Compounding - The Benefit of Investing Now:
The power of compounding underlines the importance of making your money work for you at an early age.
For instance, Sameer is 31 years old and invests Rs. 5000/-. He adds Rs. 1000/- every year till he reaches 65, after which he stops any further investment.
Sanjay, aged 21, also starts investing in the same fund. He adds Rs. 1000/- a year till he's 30. He starts investing Rs. 12,000/- every year from the age of 35 and continues to do so till he reaches 65 yrs of age.
If both earn, say, 11 % per annum on their investments, which of them would be wealthier when they retire at 65?
At 65, Sanjay would have accumulated Rs. 11.54 lacs, whereas Sameer's wealth would have been lower at Rs. 5.33 lacs.
Clearly, the power of compounding can have a significant impact on your wealth accumulation, especially if the investment is for a long period of time.
Rupee Cost Averaging - The power of disciplined investment.
In SIP, you don't have to worry about where share prices or interest rates are headed. You simply invest a fixed amount at regular intervals, regardless of the NAV. The idea is that you buy fewer units when the NAV is high and more when it is low, automatically. This is in line with the natural desire to buy low and sell high. You automatically gain without having to monitor the market, or attempt to predict the market for purchasing the units.
Rupee Cost Averaging, however, does not guarantee a profit. But with a sensible approach and long term investment, it can smoothen out the markets ups and downs and reduce the risk of investing in volatile markets. In a nutshell, Rupee Cost Averaging is an efficient and convenient vehicle to accumulate wealth in a time bound and disciplined manner.
Convenience
You don't have to take time out from your busy schedule to make your investments. Enroll for the SIP by signing up the required forms of periodic investments (monthly/quarterly) based on your convenience. Your account will be automatically debited on the requested date to purchase the units of the required fund.
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