Best Time To Invest In SIP

3 Reasons Why an SIP is the Best Way to Invest in a Mutual Fund - Finserv  MARKETS

Retail investors have poured money into equity mutual funds in the last few years. Unsurprisingly, a considerable portion of retail money has been invested through systematic investment plans (SIPs). So, what is a SIP, exactly?

A SIP, as the name implies, is investing a set amount of money into an equity mutual fund every month on a set date. Weekly, daily, or quarterly SIPs are also available, although monthly SIPs are the most common. 

So, instead of investing a big sum of Rs.120,000/- in an equities mutual fund, you open a 12-month SIP account with an equity mutual fund and invest Rs.10,000 per month. SIPs have proven to be a low-risk strategy for beating the market, according to empirical research.

When is the best time to invest in mutual funds?

Due to their flexibility, mutual funds have become extremely popular among investors. Due to the availability of different fund types that suit investors with varying risk profiles, mutual funds are becoming more popular. 

Investors today are interested in the best mutual fund to invest in and the best timing to invest in mutual funds. There are no requirements for mutual fund investors by working people. 

The following are three instances in which mutual fund investments are appropriate: 

a. Markets are at an all-time low 

b. Bond yields are at an all-time high

c. Real estate development is at an all-time low

Any or all of the scenarios above are ideal, but in reality, this moment never arrives, and you’re not sure if your current situation meets the ones listed above.

5 Things to keep in mind while investing in SIPs

Know Your Investment Goals

To begin your investment, you must have a short and long-term aim. Before starting a SIP, you must first choose what you want to achieve with this investment. This simple step will assist you in determining the quantity and duration of your investment and the size of your goal corpus.

You may have multiple financial goals, such as purchasing a car, owning a home, funding your child’s education, or marrying, and one SIP may not be enough to meet all of them. Depending on your financial goals, you may want to set up different SIPs to address each one.

Beat Inflation With Returns

You must consider current and potential inflation while selecting a SIP. You may be investing now, but your future objectives may alter, necessitating a larger sum of money to meet your demands.

People frequently lose money despite several investments because they ignore inflation, which diminishes their returns on investment. Setting a corpus aim for your financial goals while considering projected inflation over the investing period and determining the SIP amount accordingly is recommended.

Risk Management

Mutual funds and risk go hand in hand. However, SIPs spread the risk out over time, reducing the risk. The lower the risk, the longer you invest. As a result, the optimal moment to establish a SIP is when you want to invest in a lower-risk vehicle.

Choose Your Investment Scheme

There are numerous mutual fund investment options available on the market. For example, it could be an equity fund, a debt fund, or a hybrid fund. You can choose the right mutual fund for your financial goal based on your risk appetite, return expectations, and terms. 

You might choose an equity asset class if your risk appetite is high, expect a high return, and have a long-term investing horizon. A debt fund is a good option for investors who don’t want to risk too much. A hybrid fund may be suitable for investors with a modest risk appetite seeking average returns.

Diversify the investments

Diversifying your investments is a wise investing strategy. As previously said, you must invest according to your risk appetite and return expectations. Age, investment tenure, financial responsibilities, liability, income, and other factors influence an investor’s risk appetite. Diversification can aid in risk reduction. Diversify your investments by investing in various asset classes, schemes, and mutual fund firms.


Investing in mutual funds can help you achieve your financial goals by providing consistent and predictable returns while reducing your risk exposure. However, the key to mutual fund investing is to select the appropriate mutual fund schemes.

Invest regularly and patiently, adhering to tight financial discipline. After attaining one financial objective, you can terminate a SIP and redirect the funds to a new SIP for a different goal while keeping your risk appetite and return expectations in mind.


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