HomeInvestmentIf Mango is the King of Fruits – SIP is the queen of Investments
If Mango is the King of Fruits – SIP is the queen of Investments
March 12, 2022
In the midst of high turbulence in the stock market, as investors, we often find ourselves in a not-so-happy position. The reason is that uncertainty makes us fearful of losing our investments. However, there are various financial products that help us in handling this issue correctly and one of the best of these are SIPs (Systematic Investment Plans).
SIP helps in encouraging the investors to make regular investments and is quite flexible. When investing through a SIP, the investor can stop investing whenever he wants and as per his will, or he/she can also change the amount to be invested each month in the SIP as per his/her convenience.
As we all know, financial instruments have developed extensively in recent years, giving investors more choice. Diversifying financial and investment instruments can be a good way to be more profitable, reduce investment risks and develop financial markets.
This method assumes, over time, the average cost per share can be reduced by investing in fixed time intervals over a period of time, thus capturing market fluctuations.
For example, if you choose to buy Rs. 100 worth of stock each month, you could end up with 25 shares at Rs. 4 per share, 50 shares at Rs. 2 per share, and 20 shares at Rs. 5 per share. Instead of buying just 25 shares at Rs. 4 initially, by splitting the Rs. 300 investment and investing over three months, you can have 95 shares with an average price of Rs. 3.15 per share.
Financial analysts, savers, and investors agree on one point: the classic savings account yields almost nothing. An alternative is to invest. But the complexity and increased risk of this option discourage many savers.It’s no wonder that today savings accounts are compared to bottomless pits: the money in them loses its value every year. Only those who are willing to take on more risk can increase their chances of getting a better return.
However, many people have neither the time nor the knowledge to follow the stock market on a day-to-day basis. They can then consider “the queen of investment- SIP”. With such an investment product, you can invest a given amount each month in a selection of funds and the investment plan will allow you to spread your investments over time and diversify them across multiple asset classes.
In addition to all this, there is another great benefit that SIP offers and it is the magic of compounding. If you want to know more about this, visit rkfs.org and get expert assistance for making your dreams come true with accurate financial planning and for choosing the right investment product for yourself.