Mutual Funds SIP mode is the best way to beat inflation. Diversification of Investment would help the Investor to bring down loses to a great extent. Planning done in a proper way for investment in Life Insurance, Mutual Funds, gold, Fixed deposits etc., would give returns as per their performance.
Regular investment in Mutual Funds through systematic investment plan ( SIP ) would help you to acquire more units when the market goes down.
According to a survey average SIP runs for maximum 3 years. If a Mutual funds SIP is continued for more than 10 years, it would give the best returns. Systematic Investment plans give best returns and the logic is very simple. You buy the same product every month, year on year. This average the purchase and the quantity increase whenever the price goes down.
Mutual Funds SIP benefits :
- Mutual fund investment can be started as low as Rs. 500/-
- Any number of SIP can be had in one’s name
- Every day investment can also be done with Mutual funds SIP
- No age factor for SIP in Mutual funds.
- Redemption is very easy
- Invest in Mutual funds can be started in children’s name also.
- Income Tax Benefit under section 80C for ELSS mutual funds
- Returns are 100% tax free for Investments for more than year in Mutual funds
- Under Equity Linked Saving Scheme returns are tax free for investment for more than 3 years
- Dividends from Mutual funds are Tax free for Investors
- Investments can be withdrawn by systematic withdrawal plan ( SWP ) also
There a many advantages as well as many disadvantages in investing in Mutual Funds SIP.
Investment are subject to market risks which means your money would be invested in share market and you would be given some units. When the underlying share prices increase, your unit value also increase. Vice versa can also happen to your investments also.
But over the years, Mutual fund investment had shown steady increase. An experienced Mutual Funds Advisor can help you to earn more in volatile market.
Mutual Fund investments are subject to market risks. Please read the Statement of
Additional Information / Scheme Information Document carefully before investing.