SIP advantages are not limited only to low amount of investment. We know that it is almost impossible to time the market highs and lows. Most people lose money investing in shares due to timing the market rather than being a long term investor. Even the best of the investors or traders also sometimes miss market direction. For a new or investor with little time and resources to research market moves, SIP advantage is unparalleled. With Rupee Cost Averaging
, one can invest regularly in equities without worrying about timing the markets highs and lows. In long term, Rupee Cost Averaging helps to accumulate wealth which is an advantage of SIP.
Usually investors keep averaging same number of shares/unit whenever there is a decline in the price and never while the price is rising. In the long bull run this may be an opportunity loss as no further investments are made. Rupee cost average through SIP works irrespective of market highs and lows. When the market keeps decreasing, more number of units are accumulated and less number of units are accumulated when market is increasing.
SIP investing allows investors to be balanced in their investment decisions. Disciplined
and Balanced investment
is another advantage
of SIP. Investors with long term goal oriented investments often do not take investment decisions in haste and avoid panic selling or greedy buying. It is noticed many times that investors who associate their investments with goals are more balanced in their decisions.
One can choose different intervals like daily, weekly, monthly or quarterly averaging while investing through SIP which is another Systematic investment Plan Benefit. Investors have the option to choose fixed dates on which their accounts are debited for the fixed amount they wish to invest.
Another SIP benefit is the flexibility in payment options like ECS
(Electronic Clearance Scheme), Auto debit
and post dated cheques
. Out of these options, ECS is most convenient option for most of the investors.
Don’t you now think SIPs are fantastic?
Start one today!
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