SIP: The Yoga for Peaceful Investment
The 21st-century lifestyle has become all about gathering as much, as fast as we can. This fast-paced life often paves the way to stress. In India, our last resort to peaceful well-being is Yoga! Adaptation of Yoga to our lifestyle has proved beneficial.
The Investing world is often viewed as something that invites stress. As a result, most masses refrain from starting their investment journey to keep themselves away from the stress. Well, just as we have Yoga as the solution to all our problems, SIP is the Yoga to your Investments. Simple and stress-free. So, on the International Yoga Day, let’s discuss how SIP can be a Yoga for your Investment Journey!
You must be familiar with the proverb that "slow and steady wins the race," with "steady" being the keyword. This well-known notion applies to wealth development as well, and it is the foundation of one of the most popular types of disciplined investing, the Systematic Investment Plan, or SIP.
What is SIP?
- SIP is an investment instrument that allows clients to invest a small but regular sum into a mutual fund of their choice. The investor can set parameters such as the frequency of the investment, the amount of the investment, and the investment date. SIP investments help investors manage risk and develop investing discipline.
How does SIP work to Maintain your Peace?
- If you're wondering how SIP works, it's fairly simple. Investors select their preferred mutual fund plans after examining their financial goals and investment horizon. They then invest a set amount every month to achieve these objectives. SIP invests directly in your favourite plan by deducting a predetermined amount from your bank account at predetermined intervals.
What Makes SIP the Yoga of Investment?
Driven by the principle of Compounding
- Compounding is an effective concept. It is a method in which the interest generated on the principal amount is reinvested so that the interest that has been added also generates interest from that point forward. As a result, your investment will create income from the initial principal invested and the interest gained over time.
- Investing in mutual funds through a systematic investment plan (SIP) is a simple and disciplined strategy to build wealth over time. Instead of paying a flat sum, SIP investors make tiny recurring instalments. Dividends and capital gains are two types of earnings in mutual funds. In addition, you can reap the benefits of compounding if you opt to reinvest your earnings rather than extracting them.
Goes Easy on Your Pocket
- SIPs allow investors to invest small amounts at regular periods, such as Rs 100 or Rs 500. This can help you develop discipline without draining your bank account.
Makes you Disciplined
- This is the secret to accumulating riches. You become disciplined with your money when you are consistent with your investing. SIPs are a tried-and-true way to save and invest. Small amounts invested regularly might yield high returns.
Is Super Convenient
- Investors, particularly first-time investors, find SIP quite convenient. A one-time auto-debit setting is required when you first start the SIP. It will after that, function in automatic mode. As a result, you may focus on your work without worrying about the SIP's monthly operation.
Easily paused or stopped
- Most AMCs will let you keep a SIP for another 3-6 months without having to break it. If you are experiencing a brief financial hardship, you can ask the AMC to halt your SIP temporarily. Then, if the financial crisis lasts longer than expected, you can terminate the SIP. As a result, a SIP can be paused or terminated at any time.
SIP To The Rescue: How it beats Market Volatility?
- Those with a long-term investing plan typically select SIP investments but just a small quantity of money to invest. SIP investments made regularly can help you catch the market at different prices. When the markets are low, you can acquire more units this way. This implies you'd buy fewer units when the markets are high, but because you're investing for a longer period and have seen both highs and lows, the cost of buying units tends to average. Rupee Cost Averaging is the term for this concept.
While everyone's financial position is different, SIP can help you overcome unpredictable and unstable markets because timing is nearly difficult. Furthermore, unlike lump-sum investments, SIP is not expensive. It can be started with as low as Rs. 500. You can also take the yogic route to your Investment Journey by starting with a SIP with us. All you have to do is download the Glide Invest App here!