• Home
  • About
  • Recommended Reading
  • Disclaimer
  • Privacy Policy
  • Advertise / Contact

Invest It Wisely

Maximizing your EV in life

  • Home
  • Growing Your Wealth
  • Small Business Solutions
  • Healthy Living
  • Miscellaneous

How to Handle and Organize SIP Investments in 2017

By Mich

investing to grow your moneyMost of us leave our investment decision to brokers which also include the SIP investments that we make. The broker comes, tells you a few fund names that you should invest in, tells you the benefits of investing in the fund through sip investments and not lump sum investments and then lures you to buy some.

After this, his task is done. Your money keeps getting debited from your account each month, and the sip investments buy units in mutual funds for you. Tracking how the mutual fund is performing, whether to hold on to the fund or to get out of the fund and which fund to access in the case of an emergency is now all your responsibility.

This has become the fate of most investors today who do not do their own research but blindly believe in someone to help them make their investment choices. The process of SIP investments looks easy, but at the end, till you do not know what you are doing, there is nothing easy in the world. Most of the investors end up buying a number of sip investments which also include some tax saving funds. This leaves them bothered and totally hassled out in the case of an emergency or when in need of their own money.

What Are SIP’s?

To begin with, it is important to know that SIP investments are not any kind of investment. It is just a way to buy a mutual fund scheme where instead of buying bulk units, you spread out your purchase by buying smaller units in regular time periods. The scheme could include bonds, debts, balanced funds etc. This is good because one should diversify their investment because it will evenly spread out the risk. However, when it comes to over-diversification, it is as bad as not diversifying at all.

Your portfolio could have investments into equities which are high-risk investment as well as debt funds which are low risk. It is good that you have a total of just 3-4 mutual funds at one time. These, however, should be diversified into various asset classes to average out the returns. Having a few mutual fund schemes lets you keep track of the funds and so you are aware of which to take out in the case of need. This also lets you organise your funds better.

Every mutual fund gives a folio number which makes it easy for the investor to check the performance of the mutual fund by viewing the statement. So in case, you have four mutual fund schemes where you invest in, then you could increase or decrease the amount of the fund, top up with more money or reduce the amount you invest into the fund each month.

Benefits of Organising the Investments

Better organising of the mutual fund schemes lets one handle the funds better. It keeps one aware of the funds that are bought for tax saving purposes so that one does not take it out and lose out on the tax benefits.

Sip investments are a great way to buy mutual funds. The market is volatile, and when you buy a mutual fund scheme as a lump sum, then there are chances that you may have brought the units when the market was at its peak. The result of this is that when the market falls, you need to wait for years together to see the investment return back to the buy price, forget to give any profits.

However, the SIP investments let you save some money towards mutual funds each month. You thus save a fixed amount of money with which the mutual fund units are brought. You may have brought a few units when the market was at its peak and a few units when the market had bottomed out. This result in spreading out your investment and thus your investment gets averaged out.

Sips are a smart way of investing in the highly volatile market. However, it is important that you choose the right SIP plans, do not flood your portfolio with many sip schemes which will make it difficult to track and also keep a check on the performance of the SIP, so you know when to pull your money out of the fund.

Related Posts Plugin for WordPress, Blogger...

Filed Under: Investing

About Mich

Mich is your typical middle class guy with a house and 2 kids minus the dog. He works in the IT industry and likes to muse about how to achieve more for less when it comes to money.

About Invest It Wisely

Invest It Wisely is about evaluating the choices that each of us face everyday. It’s about investing your time, your money, and your energy wisely, in order to achieve your goals. The end goal is maximizing your life expectation, and exploring the ways to get there.

Subscribe!

Subscribe via RSSSubscribe via EmailSubscribe via TwitterSubscribe via Facebook

Most Popular Posts

  • How to Get Fit, Feel Better, and Get Rid of Your Foggy Head: A Few Simple Steps
  • 3 Frugal Ideas for a Romantic Valentine’s Day
  • What Would You Do with a Million Dollars?
  • The Importance of Opportunity Costs, and Why They Should Not Be Ignored
  • What Do You Need to Get out of the Rat Race and Achieve Financial Freedom?

Categories

  • Avoiding Scams
  • Book Reviews
  • Crypto Trading
  • Currency Trading
  • Economics
  • Financial Freedom
  • General Reviews
  • Growing Your Wealth
  • Healthy Living
  • Insurance
  • Interviews
  • Investing
  • Market Analysis
  • Miscellaneous
  • Motivation
  • Opinion
  • Paying Down Debt
  • Philosophy
  • Precious Metals
  • Reader Questions
  • Real Estate
  • Relationships
  • Saving Your Money
  • Small Business Solutions
  • Stories
  • Uncategorized
  • Weekend Reading

Archives

Invest It Wisely Copyright © 2016
Creative Commons License
This work by Invest It Wisely is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License
Permissions beyond the scope of this license may be available at http://www.investitwisely.com/contact