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There has been a massive wave among the Indian youth in the past few years regarding investing and stock markets. Especially with the needs taking giant leaps and plummeting during the pandemic, investors were able to book fantastic profits. But timing such a volatile market might not be easy if you are just getting started with investing.
Then what's the solution to this?
This is where SIPs come in. SIP stands for Systematic Investment Plan. It allows you to consistently invest a fixed amount into some mutual fund scheme. When you regularly invest in the market, irrespective of the market conditions, you can mitigate the risk of entering the market at the wrong time. SIP brings investment discipline as well as immunity to market mood and volatility. It takes all the timing worries out of the equation and helps you invest with consistency.
SIPs help you spread costs and get the most out of your money. When you regularly invest over time, no matter how the market is doing, you will acquire more units whenever the market is low and lesser units whenever the market is high. This gives you an average of how much your mutual fund units cost to buy.
Did you know that if you were to invest Rs5000 every month for 30 years, and if your investment grew at 12% CAGR, you would get around 1.6 crores at the end of your tenure? This is the power of consistency and compounding. Some people have called the power of compounding the eighth wonder of the world. When you invest for a long time and get money back on the money you get back, your money grows.
So what are you waiting for? Get investing now!!
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