Systematic Investment Plan (SIP): “Little drops of water make the mighty ocean” Systematic Investment Plan (SIP) is nothing but small amount of money invested on a pre-set date every month into specific mutual fund/funds. One of the best ways of entering equity market is through Systematic Investment Plans (SIPs) in equity mutual funds, as it brings in an investment discipline for the investor. SIPs help to achieve financial goals by investing small sums of money on a monthly basis that eventually leads to accumulating the required corpus for reaching the goal. For some investors who are afraid of long term commitments like PPF or Insurance plan, SIPs are the answer. They are flexible: 1.SIPs are done in open-ended funds where the investors can invest and take out the money anytime 2.There is no fixed tenor for running SIP. Once the SIP tenor is fixed, it can stopped in between or could be continued even after the tenor by placing the request with respective mutual fund company 3.Full and partial withdrawal is possible during or after the SIP tenorThe SIP amount can be increased or decreased 4.The SIP amount can be increased or decreased Just because SIPs are flexible doesn’t mean that the investment horizon could be shorter. Ideally, to reap the benefits of SIPs, the investment horizon should be for a longer term. Longer the investment horizon, better the wealth accumulation.
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