Thursday 11 May 2017

Busting Myths Surrounding Systematic Investment Plan



 Systematic Investments are one of the trendiest topics in the markets with people assuming a hot of hearsay rather than just believing on the facts. If one goes by the book SIP (Systematic Investment Plan) is just method of investment over time period that you find suitable. Although there are certain rules and specific requirements that are presented by particular bank the fundamental remains the same for all banks that is ruled by SEBI (Securities and Exchange Board of India) and AMFI (Association of Mutual Funds in India)
 Now there are very common misconceptions that are talk of the people that we will be busting today.
1. SIP works for Small investors only: It is common in the market to assume that SIP works mostly for small investors as the initial amount that one can set can be low as Rs 1000 per month. But the whole system is built to scale as per you invest more and more the process remains the same. SIP offers long time future benefits that are available for small investor as well as large investors in this market respectively. One thing is sure there are initial hiccups and certain rules that
2. Lump Sum Investments: There is hearsay that if one is committed in the SIP’s regular plan then you can’t invest in lump sum investment. It is completely wrong one can easily add the lump sum account to your current Mutual Fund SIP and it will be added as per regulations without any issues. And there are similar problems for people who think only rich can invest in these SIP as one can start as low as Rs500 per month that will act as future investment for family. SIP return ratio over long term is much better than FD or any other schemes that Bank offers.
3. No Commitments Rule: Missing one or two months SIP still there are no punishments or whatsoever it’s just your money as well investments. It is completely opposite from the EMI scheme that we adhere to while paying loan amounts. Even though you committed for 10-15 years so you can readjust as per your current scenarios. You can stop, terminate and extend at your desires. Although in Indian market there are limitations for minimum three years for tax bounded mutual funds.



4. SIP and Market effect: Most often it is thought that if markets are high SIP’s should not be started at all. Well truly SIP with its systematic approach protects the investment from market so one can start at anytime with right guidance in the beginning that corresponds to his present financial status. Markets are known to have unpredictable nature but SIP’s are fundamentally the perfect way to invest for future returns.
5. Fixed Incomes related schemes are better with security: Most of the investors have this mind set if they have Fixed Income there income is better guaranteed but the truth of the matter is it quite low. With SIP using similar growth and trends you can have much more future returns. For example Rs 50,000 investment will become around 57,000 in 5year FD while if you manage to do the similar Rs1000 per month SIP for next 5 years the end result will be around Rs 80,000 that makes it whole lot of difference.
One has to realise these funds are invested in markets and there are chances of losing so one must create breakeven points if goes lower than this I am going to withdraw the investment. This is where you need to have right guidance with experts who are in the market itself. Wealthcare Securities Pvt Ltd is certified private Wealth Management firm who for last five years has established itself as the spearhead for Financial Planning Services. Our main strength lies in Financial and Wealth Management including all the taxes, funds as well as securities. We also provide right guidance for child education and retirement planning that will benefit your future goals too. Systematic investments are one of the best ways forward in these hard competitive markets and with our services you can start looking for future dreams.
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