If you have started SIP in HDFC Equity Fund since 1 January 2008, when equity markets were at its peak, you would have got a return of 39.22% by end-2010. However, if you had invested the entire as a lump sum, you would have earned just 10.80%.
Systematic investment plan (SIP) or lump sum investment is the million dollar question! Especially, in recent times when the stock markets move up by 500 points in one week and crash by another 500 points in the very next week.
What Is Systematic
Investment Plan (SIP)?
Systematic
Investment Plan (SIP) is a simple and effective way to secure your financial
future through regular monthly contributions into a series of investment
choices. Whether you are saving towards retirement, your children's education
or for a high value purchase, SIP is highly effective as a disciplined approach
to creating long term wealth.
Rational of Investting into Indian Equity Market
An interesting fact to note is that if one had invested in the BSE SENSEX for any given period of more than 12 years in the last 29 years, he would never have lost money. As such, while somone who had invested in the markets for a shorter duration may have suffered losses, a preduent investor who would have remained invested in the markets from the beginning would have definitely made positive returns on his investments.
An interesting fact to note is that if one had invested in the BSE SENSEX for any given period of more than 12 years in the last 29 years, he would never have lost money. As such, while somone who had invested in the markets for a shorter duration may have suffered losses, a preduent investor who would have remained invested in the markets from the beginning would have definitely made positive returns on his investments.
Conclusion
Systematic investment gives discipline to your financial life. It increases your saving potential and gives compounding returns which will help you achieve your objectives.
Start dedicated SIP and see your dreams coming true!!!!!
