Millennials know the value of their hard earned money and are motivated enough to invest them in the right avenues for good returns. Financial management is something which tops their priority list. One such avenue of investing can be mutual funds via SIP. Why SIP?
Here is why. SIP is a planned way of investing monthly. You can use the SIP calculator to see the estimated amount of returns on your investments. Here we share a few reasons on why millennials should start investing via SIP.
1. Invest Small
SIP benefits are many. Yet the one that deserves to be on the top is that you can invest in small amounts. SIP lets you start investing with as small as Rs 500 per month. This gives you the convenience to invest only as much you can afford to. You can later increase the amount as your income sees a growth.
2.No Pressure of Market Timings
When you invest in lump sum, you need to time it well. You can buy a large number of units but if you do not time the market well then you can suffer losses. Such worries are reduced when you invest with SIPs as the amount invested is small.
SIP investments help you to inculcate the habit of investing regularly. It makes you more disciplined when it comes to investing. When you start investing via SIP, a fixed amount gets deducted from your account each month. This means you do not have to wait for the end of the month to see if you have any money left to save.
Through SIP investment you can average the costs. During the months when the market is expensive, the money you invest will buy fewer units and vice versa.
5.Finance Future Goals
Futures goals such as buying a house, child’s education, retirement plans, etc can be achieved with the help of SIP. You can build a corpus over a time period by monthly investments.
Market experts always encourage investors to have a diverse portfolio. In the same way, SIP can help you reap the benefits of diversification even if you invest small. The risk is spread out as you invest in different holdings. This way you can make better gains.
7.Minimizes Risk Factor
When you invest in Equity Mutual funds through SIPs, you can minimize the risk factor and ride through the ups and downs of the equity market. This is because your investment is small and is spread over a period of time. Due to this, timing the market is something which you should not be worried about.
8.Beneficial for Young Investors
Through SIP, you can stay invested for a long period of time. Hence there is a big advantage of compounding. As a young investor, you can get an early start to SIPs and your investment can compound over the long term. This helps you accumulate wealth for the future.
To start investing through SIPs make sure you choose the right mutual fund. Start investing early to have a secure future.
“Mutual Fund investments are subject to market risks, read all scheme related documents carefully.”