An SIP or a Systematic Investment Plan allows an investor to invest a fixed amount regularly in a mutual fund scheme.
Sip Advantage
SIPs help you to average your purchase cost and maximise returns. When you invest regularly over a period irrespective of the market conditions, you would get more units when the market is low and less units when the market is high. This averages out the purchase cost of your mutual fund units.
Another benefit, called the eighth wonder of the world by some, is the power of compounding. When you invest over a long period and earn returns on the returns earned by your investment, your money would start compounding. This helps you to build a large corpus that help you to achieve your long-term financial goals with regular small investments.
