Why start and SIP right away

SIP or Systematic Investment Plan is an investment method where investors can invest a pre-defined amount in a chosen mutual fund scheme at regular intervals. One can start investing in SIP with as little as Rs. 100 or 500. The SIP installments are auto-debited from one’s account at a desired frequency, be it and weekly, monthly, quarterly, or bi-annually.

SIP can help one achieve long-term financial goals. For this, you need to decide the amount you can invest regularly, the duration, the frequency, and a mutual fund scheme to invest in. The earlier one starts with SIP, the better it is for their financial future. Let’s see why:

Why you should start your SIP now:

Financial discipline

SIPs are best to form an investment habit early on in one’s working life as a SIP can be started with even a small amount. It is also hassle-free, as you can set auto debit for the SIP amount. With auto debit, you ensure that you invest regularly, without fail.

Compounding returns

The money invested through equity mutual fund SIP gets invested in the market. Over a period, your investment has the scope of generating returns, which in turn, get reinvested in the market. So, you there is potential to earn returns on returns. This is known as compounding. The power of compounding is higher when you invest for a longer time horizon, say 5 to 10 years. This is precisely why you should start SIP early.

Takes care of market lows and highs

Investing can get tricky and overwhelming for new investors, especially given the ups and downs in markets. It is not always possible to follow the maxim of ‘buy low, sell high’ even for veteran investors. With SIP, because you are regularly investing regardless of market conditions. when the NAV is low, you get more units of the mutual fund scheme and when the NAV is high, you get fewer units with the same amount. Over a period, your cost gets averaged out. Hence, you do not need to ‘time’ the market.

Diversification

A golden rule of investing is to diversify your investment. You can have different SIPs to invest in gold, stocks, indices, or commodities, and other asset classes, diversifying your portfolio and lowering your risk.

Facilitates goal-based investing

There is no limit on the number of SIPs you can open. Let’s say you open 3 SIPs of different amounts. One to meet your long-term objective of retirement planning, another to make the down payment for your house in the next 5 years, and one more to accumulate funds for a short getaway abroad. With goal-based SIP, achieving your goals becomes more manageable.

*Please note that not all mutual funds schemes offered by Axis Mutual Fund have this SIP feature of investment as small as Rs. 100. For complete information refer Key Information Memorandum (KIM) or Scheme Information Document (SID) of respective mutual fund schemes uploaded on the website. /

This document represents the views of Axis Asset Management Co. Ltd. and must not be taken as the basis for an investment decision. Neither Axis Mutual Fund, Axis Mutual Fund Trustee Limited nor Axis Asset Management Company Limited, its Directors or associates shall be liable for any damages including lost revenue or lost profits that may arise from the use of the information contained herein. No representation or warranty is made as to the accuracy, completeness or fairness of the information and opinions contained herein. The material is prepared for general communication and should not be treated as research report. The data used in this material is obtained by Axis AMC from the sources which it considers reliable.

While utmost care has been exercised while preparing this document, Axis AMC does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Investors are requested to consult their financial, tax and other advisors before taking any investment decision(s). The AMC reserves the right to make modifications and alterations to this statement as may be required from time to time.

Statutory Disclaimer: Axis Mutual Fund has been established as a Trust under the Indian Trusts Act, 1882, sponsored by Axis Bank Ltd. (liability restricted to Rs. 1 Lakh). Trustee: Axis Mutual Fund Trustee Ltd. Investment Manager: Axis Asset Management Co. Ltd. (the AMC) Risk Factors: Axis Bank Limited is not liable or responsible for any loss or shortfall resulting from the operation of the scheme.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.