May 10, 2018 4 min read

How an SIP Investment Today Can Benefit Your Future Tomorrow?

Gain the knowledge about how investments in mutual funds through SIP can help you generate monetary growth in the long term.
The attitude that you have can make or break your chances of becoming a successful and happy person. Because, if you tell yourself that you’re going to get something done, then you need to shut the door on all the distractions and start giving your hundred percent for that something.

Implementing what is required to accomplish your goals on a regular basis is the only way to reach the zenith. If you ever had dreamt of becoming the most efficacious investor of today’s world, then there are only two key-mantras which can assist you in realizing this dream. The first one is harboring rigorous discipline in your life and the second is being patient. Warren Edward Buffet, an all time successful investor and business magnate, once said, “Successful investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can't produce a baby in one month by getting nine women pregnant.” Similar is the case with SIP investment in mutual funds. What matters the most is that for how long you are going to invest and how disciplined you are. Just like the aphorism that says ‘little drops of water make the mighty ocean,’ the SIP investments in mutual funds are likely to turn into a huge amount at the end.

Supposing that you are not aware of what SIP investment is, we would like to enrich your knowledge about the same. Explained in very basic terms, it is a mode of investment in which you can invest a predetermined amount at an average rate for a specific period of time regularly. Investments can be made on daily, weekly, monthly or quarterly basis. Now the thing is wherever you invest, fear of losing money will always follow you like your shadow. To overcome the same, you need to be patient and have a long-term investment perspective.

Here, we would like to share some of the benefits of investing in mutual funds through Systematic Investment Plan.

  • Savor the Gain in the Long Run -
    Peter Lynch, an American investor, mutual fund manager, and philanthropist has prominently quoted, “Long-term Investing has gotten so popular, it’s easier to admit you’re a crack addict than to admit you’re a short-term investor.” It has been assiduously analyzed that short-term investments are prone to more risks because of market volatility. Hence, in short run, the market tends to dominate your investment. But, if you are a long-term investor, you gain the ability to dominate the market. Investments done through SIP in mutual funds for a long time will let you enjoy appreciable gains.
  • Financial Discipline Inculcated Automatically -
    Isn’t this benefit a boon for us? Yes, it is. You don’t have to put in extra effort to cultivate this habit like the other ones. This will help you to invest bit by bit regularly without having to bear the burden of investing the entire amount at once. Also, the situation will not leave you with anxiety about the probability of loss of your principal.
  • Compounding, a Magical Wand -
    Albert Einstein, the biggest theoretical physicist after appreciating the importance of compounding, said, “Compound Interest is the eighth wonder of the world. He, who understands it, earns it, he who doesn’t, pays it!” Since compounding earns interest on interest, therefore SIP investments utilize this power of compounding to grow your money in multiples. This effect works the most for those who have a long horizon for their investments.
  • Don’t Worry, Rupee-Cost Averaging Is in the Line -
    Another prominent advantage next to the compounding mechanism is the Rupee-Cost Averaging effect. The equation involved in this goes like – if net asset price is low, then more units are dispensed and if the price moves high, then lesser units are handed out. This, in turn, averages out the cost of buying the units in a scheme over a span of time.

When an individual thinks of investing, the first feeling he goes through is of insecurity related to market and expression on face is lines on the forehead with twisted eyebrows. He then postpones his investments considering the market conditions. To our cognition, timing the market for making an investment is not what successful investors like Charlie Munger, Warren Buffet, or Peter Lynch, would suggest. When you earn regularly, spend regularly then why not invest regularly? And, not only one should invest regularly, but investment should be made as early as possible. This is because only those seeds which are sown today will turn into reaped fruits tomorrow. Remember nourishment of those seeds regularly is necessary so that the fruits reaped in future can fulfill your taste and health requirements.

In case you’ve made your mind to invest in mutual funds via SIP, connect with our experts to seek help in this context. We can guide you on the best performing mutual funds as per your needs and objectives.

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