Systematic investment plan, as the very name suggests, refers to the time-tested strategy of buying and selling stocks at a pretty lower estimation. Unlike other investment plans systematic investment plans are quite risk free in nature.
It helps to create wealth in a regimented manner over a longer period of time. Many investors compare it with a wonder drug that cures all your investment related injuries. The winds of change have already set in with more and more people getting interested in opting for systematic investment plan. Systematic investment plan helps your money grow at a much faster rate without much trouble.
This very fact has been attested by the recent media reports. The reports suggested that the systematic investment plans are a great way to save money over a longer period of time. The minimum amount that can be invested is low compared to other investment options. The frequency of investment is usually monthly or quarterly. The systematic investment plan resembles a recurring deposit where you put small amount every month, which is automatically deducted, from your salary cheque. The only difference is that the amount is invested in a mutual fund.
Some of the benefits of systematic investment plan are as follows:
- Systematic Investment plan is a safe and convenient mode of investment perfectly suited for amateurs who are new into this field.
- Due to dollar cost averaging market timing becomes irrelevant making it all the more easier for investors.
- Systematic investment plan has also got a much greater power of compounding.
Systematic investment plan also helps to save money on a regular basis.
- It is a hassle-free mode of investment, which requires you to devote just a few hours to get things done.
- Systematic investment plan serves as a great tool to counter inflation.
- It is a much cost-effective option of investment.
- Important points to remember while making a systematic investment plan.
- Investing becomes a much simpler task if you can find the best time to buy and sell.
- Go for an automatic timing mechanism to avoid market oscillations and reap rich dividends easily.
- To reap the maximum benefits go for long-term investment plans (10- 15 years generally).
- Do a proper market research before taking the final leap. In this age of information boom there is really no dearth of information. You can stumble upon loads of information by only a click of the mouse button to answer all your nagging doubts.
- Get in touch with only reputed fund managers or brokers to avoid difficulties in investment.
- Take advice from friends or relatives who have invested in systematic investment plans.
- Take proper calculated moves and then decide the time span of investment.
Systematic regular investment helps you to adjust easily with the highs and lows in the market and makes the process of saving money all the more easier. So, do not ponder over your investment plans. Start saving money at a very early age through systematic investment plan and keep your retirement blues at bay.
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