Skip to main content

What Is an SIP Investment and What Are its Benefits?

DUBAI, UAE - (ARAB NEWSWIRE) - Financial freedom is the one thing everyone strives to attain to get the things they have dreamt of owning their entire life. However, individuals can achieve financial freedom or flexibility only with strong financial planning and investing in the right way. Lately, Systematic Investment Plans (SIPs) have evolved as an excellent investment option for both amateur and seasoned investors. A Systematic Investment Plan (SIP) is a form of investment vehicle offered by mutual funds in which a person can invest a small, fixed amount of money regularly rather than making a large lump-sum investment. 

People invest a fixed sum of money in a Systematic Investment Plan (SIP) investment periodically to purchase a particular number of fund units. When this process continues for a long time, investors can invest in the mutual fund systematically, irrespective of the market condition. In short, while investing in SIPs one will not need to time the market for their investment. Timing the market can be risky as an investor can invest at the wrong time and incur a loss, a sheer factor of unpredictability that Systematic Investment Plan (SIP) investments try to eliminate.

 

What is SIP?

 

Systematic Investment Plans (SIPs) involve regular monthly investments in a mutual fund, ensuring that the investor develops the habit of building financial discipline. Additionally, Systematic Investment Plans (SIPs), being market-linked investments, have the potential to beat inflation and can help investors to grow their money over time.

 

Benefits of SIP Investments

The following are some benefits of investing in Systematic Investment Plans (SIPs):

1. Automatic Investment 

When an investor opts for a Systematic Investment Plan (SIP), a prespecified amount is transferred or deducted from their bank account on a fixed date every month. The deducted amount is used to buy units of the mutual fund at the current market rate.

 

2. Lower Overall Cost of Investment 

 

When investors start investing the same amount in a mutual fund at fixed intervals spread over the long term, they can buy more units when the price is lower and vice versa; i.e., buy less when the price is higher. This reduces the overall cost of investment over time.

 

3. Reduced Investment Risk 

A primary reason why Systematic Investment Plans (SIPs) have a reduced investment risk is that the potential returns are calculated based on the average Net Asset Value (NAV) during the investment period.  Based on the current and subsequent month's NAVs, investors will be able to get certain units for the amount invested each month. Investing in an SIP allows investors to get more units when the markets are priced low and fewer units when the markets are priced high.

4. Liquidity at Anytime 

Most Systematic Investment Plans (SIPs) let investors withdraw their funds as they see fit, which make them highly liquid at anytime. However, investors may sometimes have to pay exit load fees.  Exit load fee is charged when investors fully or partially exit a scheme within a certain period from the date of investment, as mentioned in the Scheme Information Document. 

 

5. Potential for Long-term Gains

People who invest regularly through SIP for a long period of time will reap the benefits magnified by the power of compound interest. This ensures that investors earn returns not only on their principal amount invested but also on the gains earned from the principal amount.

 

6. Build Financial Discipline

 

Conclusion

Systematic Investment Plans (SIPs) are one of the easiest ways for investors to begin their investment journey. SIPs are not only convenient, affordable, and flexible, but they also have the potential to generate in the long-term wealth. Individuals can invest in a Systematic Investment Plan (SIP) at any time with minimal risk. There is no ideal time for an investor to start investing in SIPs. The earlier they start, the better their potential returns can be. 

SIPs are available to anyone who is interested in investing. An interested person needs to set up a SIP investment in UAE through a bank or financial institution and enjoy the fulfillment of their financial dreams. 

About iQuanti
iQuanti ignites powerful and predictable digital marketing performance for global brands with an approach rooted in data science and deep vertical knowledge.

Notice:
Opinions, analyses, reviews, or recommendations expressed in this article are those of the select editorial staff's alone, and have not been reviewed, approved, or otherwise endorsed by any third party.

 

This press release is issued through Arab Newswire (www.arabnewswire.com) – a newswire service for Arab World, Middle East and North Africa (MENA), and it is distributed by EmailWire™ (www.emailwire.com) – the global newswire service that provides Press release distribution with guaranteed results™.

 

 

 

 

 

Comments

Post a Comment

Popular posts from this blog

Accely Announces Appointment of Alok Bapna, Ex DXC/CSC Leader as President

Accely has appointed sales and new business development veteran Alok Bapna as its new President . DUBAI, UAE -- ( Arab Newswire ) -- At Accely, we will align his experience in the IT industry with our business goals to achieve new milestones. We look forward to utilizing his expertise in various areas so Accely can offer clients tailored and refined business solutions. Over the years, Accely has been recognized as a trustworthy SAP consulting service for its innovative solutions. With a new leader in the senior management, we can enrich our core services such as IT, enterprise application support, and consulting services. As a result of Alok's diverse experience, Accely can expand into wholesale, retail, consumer goods, life sciences, engineering and construction, and manufacturing markets. Alok's approach to leadership will enhance Accely's ability to solve business problems and deliver high-quality results. His ability to address and resolve issues in the IT industry is ...
Post a Comment
Read more

SAP Inside Track Published Accely’s New Product Development and Recent Acquirements

DUBAI, UAE – ( ARAB NEWSWIRE ) -- Accely, an EMEA South Partner, has ventured into the intellectual property horizon by acquiring two pioneering companies and crafting a futuristic product line for these enterprises. Nilesh Shah, CEO, Accely, a leading SAP solution provider , and his team have assisted varied enterprises in automating operations and departments over the years. In recent years, the company saw a shift in market expectations and an increased demand for technical assistance. This insight was the much-needed impetus for Accely. They took this initiative to step into the intellectual property realm for the first time and introduce a new product line with the assistance of two firms that specialize in this space. Nilesh Shah, CEO, Accely Accelerated Products covers S/4 HANA ERP solutions for intelligent enterprises, while Activa Factor y specializes in Success Factors that improve project management methodologies and help businesses thrive. These specialists ensured that Ac...
Post a Comment
Read more

AfricaNewswire.net Relaunches to Make News for Organizations with Press Release Distribution to media in West, East, North and South Africa

Businesses, organizations and other entities publish and distribute press releases to media in Africa in the following languages: Arabic, English, French, Portuguese and Spanish. AfricaNewswire.net Press Release Distribution to African Media Johannesburg, South Africa and Houston, TX - (EMAILWIRE) -  Africa Newswire ™ ( www.africanewswire.net ) press release distribution service,  relaunches to meet the demands of the growing market in Africa. With continent’s GDP said to have increased by 4.1 percent in 2021, organizations, big, small to medium size companies are gearing to reach their prospective audience with content distribution.  In 2020, despite COVID-19,  some African countries showed rapid growth.   According to Listwand , there were 20 countries that grew fastest. Top four of these countries were Rwanda at 9 percent, even though it was revised by the  International Monetary Fund (IMF) to 5.1 percent.  Ethiopia is right behind...
Post a Comment
Read more