SIP Investment: Even though the returns in the equity market have been and are being tremendous. But, now people are focusing more towards mutual funds. In this also, instead of investing money in risky assets, investors are investing in Systematic Investment Plan (SIP).
SIP Investment: There is a huge boom in the Indian stock markets these days. But, still safe investment is still the most popular. Even though the returns in the equity market have been and are being tremendous. But, now people are focusing more towards mutual funds. In this also, instead of investing money in risky assets, investors are investing in Systematic Investment Plan (SIP). But, if you want to increase profits at a faster pace, you will have to follow a rule. It is important to understand this.
How should one invest?
Financial planners say SIP investors should follow the rule of 70:20:10. This will not only increase investment but will also increase profits. The rule of 70:20:10 means that 70 percent should be allocated to largecap, 20 percent to midcap and 10 percent to smallcap funds. Remember, if you have not invested this way yet, or need to balance your portfolio, then do so. This is the basic rule of investing. This will never cause any problem in the portfolio.
How much return did SIP give in the last three years?
According to the data, the average 3-year SIP return of largecap funds has been 22%-24.95%. Whereas, the average return for large and mid cap funds was 25.35%-28.33%, the average return for multicap funds was 24.26%-30.22%, the average return for midcap funds was 30.06%-35.24% and the average return for smallcap funds was 33.27%-38.09%. .
How and when do you get the benefit?
Financial planners feel that times have always been good for SIP. But, if no one has taken entry in it yet then time has not passed. The bullishness the markets are showing, there are more chances of consolidation in the coming times. Small investors should maintain their investments now. There is an opportunity for SIP investors when the market falls, whereas when the market rises, the pace of returns increases. When the market falls, they can get more units of the scheme due to fall in SIP prices. At the same time, the rule of 70:20:10 gives benefit in investment with the help of diversified portfolio.
For what period to invest?
According to financial planners, investors should plan for a period of 8-10 years in equity mutual funds. In the last 3 years, the number of people investing through SIP has increased continuously. Many new investors are also doing SIP for their financial goals. The SIP contribution figure has crossed Rs 1 trillion in FY24. According to the data of AMFI, an organization of mutual fund companies, the total number of SIP accounts has reached 7.44 crore in the financial year 2023-24.
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