SIP in Mutual Funds vs SIP in stocks: Which is better for you?

By FE Online6 days ago

AD

Following this route, the investors would not need to time the market, invest through a regulated approach and protect themselves during volatile times while earning better returns.

The information of rising COVID cases on the other hand brings the stock market downhill. In such an erratic mode of market conditions, doing a SIP is highly recommended.

Gone are those days when roti, kapda and makaan were the basic requirements of human life. With major advancements in the 21st century, the internet and SIP (Systematic Investment Plan) have got into this new list of bare essentials. We often hear the Millenials promoting SIP it, shut it and forget it rather than fostering Buy low and sell high. Because in their belief, timing the market is way too complicated, and in most cases, it never works.

Volatility in recent months has tested the patience of the market participants. The pandemic was the major cause behind this and thus, news like the COVID vaccines availability brings optimism to the market, which rallies the market upwards. Simultaneously, the information of rising COVID cases on the other hand brings the stock market downhill. In such an erratic mode of market conditions, doing a SIP is highly recommended.

Just like a SIP in mutual funds, one can also go for the ESIP (Equity SIP) route to park their small amount of investments in stocks at regular intervals. This move would give investors an advantage over unpredictable stock price movements. Following this route, the investors would not need to time the market, invest through a regulated approach and protect themselves during volatile times while earning better returns.

SIP in stocks allows investors to fix either the amount to be invested or the number of shares needed to be purchased at a regular interval. Like mutual funds SIP, an ESIP allows investors to invest in stocks in a disciplined manner, helps them spread their investments over time, and lets them benefit from rupee cost averaging, thereby creating a sizable corpus with small investments.

Continue read on financialexpress.com