Systematic Investing
offers a disciplined way to invest a portion of your income, at regular intervals, without trying to time the market and thereby, also protecting you from extreme fluctuations in the market. Its effect on your investment's growth, over time, can be nothing short of amazing. This concept is also called Rupee cost averaging.
In plain English, Rupee cost averaging means investing regularly, regardless of what the market is doing. It’s a way of making the value of your investment grow, at the same time it helps in removing the difficulty of “timing the market”. In the long run, investing on a regular basis also helps to reduce your overall risk.
S.I.P benefits backed by Facts of Equity Investments.
Systematic Investing in a Mutual Fund is the answer to preventing the pitfalls of equity investment, and still enjoying the high returns. It makes all the more sense today when the stock markets are booming.
Start from as low as Rs100/- per month to as high as you can, amount doesn't matter. What will grow your money is disciplined investment in equity market by professional fund managers.
Why investing regularly works ?
Investing on a regular basis removes the stress of “timing the market” because you are employing the concept of “Rupee Cost Averaging”. If you are an investor in mutual funds it means that you buy more units when the purchase price is low and fewer units when the purchase price is high. The trick to all this is to remember that it’s not the price you pay for each unit that matters. It’s the average price per unit over time that determines your overall return.
Rules of thumb for Systematic
Investing
Have a goal
Set clearly defined; weekly, monthly, yearly and lifelong goals.
Evaluate your goals regularly
While establishing ones goals is very important, evaluating them on a regular basis is critical.
Spend Less than you earn
Living above ones means is one sure way into a treacherous trap. Get into SIP instead, as it will save you the money that you may spend otherwise.
Minimise your debt
Every penny that you spend in paying interest on debt is money lost. Consolidate any debt you have by setting a target, as even a 10% return on your investments will not help if one is paying 18% interest on your debts.
Invest early, wisely, and as much as you can
A small amount also has a potential to grow into a good chunk of returns. Therefore, adopt a habit of investing every small surplus.
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