Answer Book question
A Systematic Investment Plan is an instruction to invest a fixed amount into a mutual fund on a fixed date every month. It is not a product; it is a way of buying a product. The fund you choose determines the risk; the SIP only determines the rhythm.
A Systematic Investment Plan is an instruction to invest a fixed amount into a mutual fund on a fixed date every month. It is not a product; it is a way of buying a product. The fund you choose determines the risk; the SIP only determines the rhythm.
A man asks "is SIP safe?" The honest answer is "safe compared to what?" An SIP into a liquid fund is very stable. An SIP into a small-cap fund can lose a third of its value in a bad year. SIP is the bus; the destination is the fund.
By investing monthly regardless of price, you buy more units when prices are low and fewer when high. Over long periods that smooths the average cost. It also removes the decision "is now a good time," which most people get wrong.
Which fund the SIP goes into and why Expense ratio and whether it is a direct plan Date alignment with salary credit Whether you would continue during a 25 percent fall
People say "I have SIPs" as if that describes their investments. Ask what the SIPs are in.
SIPs are now widely sold through bank branches in Kerala, usually in regular plans with commission. The same fund as a direct plan is cheaper by about 0.5–1 percent a year, which compounds into a lot.
Same fund, ₹5,000/month, 20 years. Regular plan at 11 percent net: about ₹43 lakh. Direct plan at 12 percent net: about ₹49 lakh. The difference is the commission.
An SIP into a bad fund is still a bad investment, just done monthly.
Name the fund, not the SIP Switch to direct plans Set the date to the day after salary
Does SIP guarantee profit? Should I stop my SIP when the market falls? What is an index fund?
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