SIP - Investor"s Smart Choice For Long Term Investment
What Is SIP - Systematic Investment Plan? SIP or systematic investment plan is a kind of recurring savings account opened up with an AMC for disciplined and regular participation in a mutual fund.
An SIP is an easy, effective and a hassle free technique to WEALTH CREATION for each & everybody without need of understanding the complexities of various markets.
How Does SIP Works And How SIP Builds Wealth Step By Step? Through SIP, as said earlier one can take part in the INDIA GROWTH STORY even by small contribution as low as Rs.
1000 a month in any particular land.
A pool account is created where in a number of investors joined together mutually according to their contribution create great synergy and allow a professionally trained Fund Manager to take Market Calls with detailed research & study.
The F.
M.
(Fund Manager) now optimizes returns by beating the set benchmark and thus generates a huge compounded growth over long run.
The profits & surpluses hence earned are ultimately of the participants i.
e.
the SIP investors like you so, are rewarded in proportion to their investments.
All the buying and selling for an SIP investor is done in term of units bought or sold on a particular day at the then market price of the unit (after adjusting the fund management charge) called the NAV or the Net Asset Value.
How Is SIP Different / Beneficial From / Than Lump Sum (Single Time Bulk) Investment? Unlike a onetime purchase, SIP, a unique concept allows you to spread your mutual fund units buying over a period thus lowering the risk portion as well as / simultaneously freeing you from timing the market.
Moreover the principle of RUPEE COST AVERAGING fields greater returns which is explained from below example.
Below example will show you real benefit of SIP investment as compared to one time lump sum investment.
Lets take an example of 6 SIP installments only.
Investor one invests 30,000 in a single investment at NAV value of 10, while investor two invests in SIP of 1000 every month, where he gets different value of NAV (such as, 10,11,9,8,8,11) every month.
So the investor two will get average NAV (10+11+9+8+8+11)/6 = 9.
5, now at the end of sixth month, when both investors redeems their money (at NAV of 11), investor one will get 3000 Profit, while investor two will get 4737 (1737 more than investor one).
Above example is only for six month SIP investment, while on longer period of investment say 15 or 20 years, the return will be very huge as compared to the lump sum investment.
This is the power of SIP.
An SIP is an easy, effective and a hassle free technique to WEALTH CREATION for each & everybody without need of understanding the complexities of various markets.
How Does SIP Works And How SIP Builds Wealth Step By Step? Through SIP, as said earlier one can take part in the INDIA GROWTH STORY even by small contribution as low as Rs.
1000 a month in any particular land.
A pool account is created where in a number of investors joined together mutually according to their contribution create great synergy and allow a professionally trained Fund Manager to take Market Calls with detailed research & study.
The F.
M.
(Fund Manager) now optimizes returns by beating the set benchmark and thus generates a huge compounded growth over long run.
The profits & surpluses hence earned are ultimately of the participants i.
e.
the SIP investors like you so, are rewarded in proportion to their investments.
All the buying and selling for an SIP investor is done in term of units bought or sold on a particular day at the then market price of the unit (after adjusting the fund management charge) called the NAV or the Net Asset Value.
How Is SIP Different / Beneficial From / Than Lump Sum (Single Time Bulk) Investment? Unlike a onetime purchase, SIP, a unique concept allows you to spread your mutual fund units buying over a period thus lowering the risk portion as well as / simultaneously freeing you from timing the market.
Moreover the principle of RUPEE COST AVERAGING fields greater returns which is explained from below example.
Below example will show you real benefit of SIP investment as compared to one time lump sum investment.
Lets take an example of 6 SIP installments only.
Investor one invests 30,000 in a single investment at NAV value of 10, while investor two invests in SIP of 1000 every month, where he gets different value of NAV (such as, 10,11,9,8,8,11) every month.
So the investor two will get average NAV (10+11+9+8+8+11)/6 = 9.
5, now at the end of sixth month, when both investors redeems their money (at NAV of 11), investor one will get 3000 Profit, while investor two will get 4737 (1737 more than investor one).
Above example is only for six month SIP investment, while on longer period of investment say 15 or 20 years, the return will be very huge as compared to the lump sum investment.
This is the power of SIP.
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