" Choosing the Right SIP "

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SIP:

  • It is known as Systematic investment Plan.
  • A fixed amount of money is invested in a financial instrument in regular intervals.
  • It is a smart financial tool for creating wealth.
  • Mutual Fund in SIP form gives best return for long term.
  • Small savings can also be invested in SIP.
  • Investment or market timing is irrelevant in SIP.
  • SIP enables rupee-cost averaging by investing systematically.
  • Huge benefit comes from the Power of Compounding. 


Few points to check before buying Mutual Fund in SIP form


  • Star rating of the mutual Fund should be high and 5-star is preferable.
  • Net asset of the Fund should be high and not less than 500 Crore.
  • Expense ratio of the Fund should be low and not more than 2.5.
  • Annual Return of the Mutual Fund should be high as per your financial target.
  • Avoid investing in Thematic and Sector Fund.

Happy Investing !!!




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Comments

  1. Avijit6 December 2017 at 22:34

    Hi Pradip,
    You said "Mutual Fund in SIP form gives best return for long term." But long terms means minimum how many years.Everywhere says that sip and long term investment so don't say it is your choice. I'm asking this because i had a sip 1000/pm for 5yrs but i got approx 60k after 5yrs so profit/benefit was nothing.

    ReplyDelete
  2. PRADIP7 December 2017 at 05:44

    1) If you invest in Equity Balanced Fund, your minimum duration to be invested in is 05 years.
    2) For Equity Large Cap and Multicap Fund : Minimum 07 years.
    3) For Mid and Small Cap Fund: Minimum 10 years.
    4) Equity Mutual Funds are subject to market risk. There is no question of guaranteed return.
    Case-I :
    If you choose a fund which has poor rating, high expense ratio, low market cap and poor performance record, there is high chance that you may lose your invested money and thus no question of profit or return.
    Case -II:
    You are invested in good SIP but you are not monitoring performance of your fund. If performance of your fund becomes poor, you should stop further investment and switch to other good fund. Otherwise, you will be a loser in the long run.
    Now please try to recall whether you are invested in right SIP as per your investment goal and time and whether you are monitoring your fund from the beginning!!!!

    ReplyDelete
  3. Avijit7 December 2017 at 05:58

    Thanks for your reply.Actually it was bought by my father for me that time i was not wise as present and don't have any knowledge about sip/mf.

    ReplyDelete
  4. Unknown8 March 2018 at 10:31

    Pradip, Case-1: if I opt perpetual SIP, is it possible to stop and withdraw after few years (say 7 years)? Case-2: If I fix the tenure (say 7 years) at the same scheme, I believe I will get the exactly same return / benefits like Case- 1, right? Please confirm.

    ReplyDelete
  5. PRADIP11 March 2018 at 00:44

    1) You will be able to stop your SIP after 6 months of your initial investment and withdraw anytime you want.
    2) You are right.

    ReplyDelete
  6. Phani Kumar9 June 2020 at 03:35

    Hey, Thanks for sharing this information. I just see your blog and impressed. Keep the same alltime. VST Industries, Nippon Life .

    ReplyDelete
  7. Phani Kumar21 June 2020 at 04:05

    Hey, thanks for the information. your posts are informative and useful. I am regularly following your posts.
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    ReplyDelete

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