5 Tips To Customise The Perfect SIP Plan For You-
September 22, 2021
There are so many different options and ways in which you can catapult your journey towards financial freedom if you make the decision to wisely invest your money. We often find that taking the first step towards our goals is the most bewildering as there are so many financial products available in the market. If you are a beginner, then a SIP is perfect for you! A Systematic Investment Plan allows you to save and invest your money regularly, it does not have to be a huge amount, which is why it allows beginners to start their journey towards financial freedom. You can choose to start a SIP on a monthly, weekly, or yearly basis depending on your needs. Here’s what you can do to make the most out of your SIP investment!
- Make sure that the mutual fund or the SIP plan that you choose, has been around the market for at least 5 years. Do not jump to invest in the trendiest plans or the most touted funds- instead, research and collate your needs and capacity to your investment. A great way to do this is to analyse the returns of a fund over a considerable amount of time and then make the calculated decision of whether you need to invest in this or not. Make sure that the fund house that you choose to invest in is recognizable and is registered by SEBI.
- A high volatile fund might attract you to invest a chunk of your money in it, but make sure that you first analyze the current financial market before you hop on to trends. A great way to do that is to track the stock market and analyze the volatility of the market before you invest in high volatile stock / fund. See their past trends and returns, if they have a consistent track record, investing might be a good option. Stay away from risks like low liquidity by actually doing the homework and not falling prey to trends as they can become quite costly.
- The total corpus should be expansive. If you are new to investing, look for funds with a corpus size of 500 – 1000 crores.
- Try investing in tax-saving schemes like an Equity Linked Savings Scheme (ELSS). These schemes are not only a lucrative way to get back high returns on an investment but also help tax deduction up to Rs 1.5 Lakh a year. ELSS can also be used as a Growth Fund which can be used as a long-term wealth creation platform, where you can realize the full value of the investment when you choose to redeem it. ELSS linked schemes are great for young and old investors alike who are starting out their investment journey, and looking for a higher rate of tax deductions.
- Diversify your portfolio. We always like to stick to our comfort zone and invest in stocks that are only doing well for the current time period, ignoring the other stable stocks, which go a long way to protect us from the volatility of the market. The returns of the major asset categories like stocks, bonds, and cash move differently at all times, as the forces of the market can help one category do better and hinder the growth of another. By diversifying your portfolio you can reduce the risk of losing money and make sure that the overall investment stays stable.
Don’t be afraid of venturing out and taking a step towards securing your financial future. The plethora of financial advice and investment plans can confuse any first-time investor, which is why we recommend that you choose a financial roadmap that is unique to your own needs and goals and make sure that you are consistent and stick to it! Deciding to take the first step is half the job done!