During their regular morning walk, Sarthak asks Yojak about concept and benefits of SIP in mutual funds.

Yojak explains that a good habit like their morning walks repeated daily leads to beneficial results.

Similarly making a routine habit of investing will lead to wealth growth over a period of time.

Routine monthly investing is known as Systematic Investment Plan or SIP.

SIP is simple:

You don’t need to invest large lumpsum amounts. Set aside an amount to invest every month, decide which Mutual Fund you wish to invest in, the date of investment and start investing. It’s that easy!

Every month, on the specified date your account will be debited by the set amount and a certain number of mutual fund units, dictated by their NAV, will be purchased.

SIP has several benefits:

You don’t need to time the market, you get a weighted average return over a period of time

The power of compounding comes into play increasing your wealth exponentially/substantially

It brings in a certain discipline in investing habits and helps in achieving your financial goals

So plan your goals, identify the monthly amount you need to invest and most importantly select the right mutual fund to invest in and get started.

https://www.hdfcsec.com/systematic-investment-plan-sip