According to State Bank of India (SBI), SIP allows one to buy units on a given date each month, so that one can implement a saving plan for themselves. The biggest advantage of SIP is that one need not ‘time the market’. In timing the market, one can miss the larger rally and may stay out while markets were doing well or may enter at a wrong time when either valuation have peaked or markets are on the verge of declining. Rather than timing the market, investing every month will ensure that one is invested at the high and the low, and make the best out of an opportunity that could be tough to predict in advance, added SBI MF.
Advantages of SIP Investment, according to State Bank of India (SBI) Mutual Fund:
1. A fixed amount of money is auto-debited from your bank account and invested into a specific mutual fund scheme. Small amount of savings is done on monthly basis via SIP.
2. More units are bought when market is up and lesser when market is on decline. SIP involves fewer amounts of risks as the investment is done at regular intervals.
4. SIP has low investment amount and various intervals of payment which makes it flexible for investors. Automatic deduction can be done on the basis of investor’s income flow. Also, it helps to save a good amount of money over a period of time without any financial pressure.
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