What is SIP?
Simply put, SIP is Systematic Investment Plan. This is where you basically make regular monthly investments. The amount does not have to be high. You can start with as low as Rs. 500 a month.
What if the market falls after I invest?
|Month||Amount invested||unit price||units purchased|
|January||Rs. 3,000||Rs. 20.00||150.000|
|February||Rs. 3,000||Rs. 24.00||125.000|
|March||Rs. 3,000||Rs. 28.00||107.143|
|April||Rs. 3,000||Rs. 32.00||93.750|
|May||Rs. 3,000||Rs. 36.00||83.333|
|June||Rs. 3,000||Rs. 40.00||75.000|
The above data is for illustrations purpose only to explain the concept.
What does power of compounding have to do with SIP?
Regular disciplined investments will go a long way even if your amounts are not large. Simply start with making small investments and give them time to mature. Investing early gives your money more time in the market to mature, instead of trying to time the market. As you invest, your investment will generate returns. These returns are added to the amount you continue to invest regularly and to the original invested amount. This cycle leads to a large corpus over time. This is the power of compounding.Investors who invest regularly but early can end up having a higher corpus than those investing later but with higher amounts.Read More
When I started investing, my salary was low.So, my investments were low. What now?
You started investing when you got your first job and you didn’t have too much to invest. Now you’ve progressed in your career and can invest more. So Top-up your SIP. This means you can increase your investment amount which in turn will lead to formation of an even bigger corpus in future.
You started with Rs. 1000 per month. Just see how it would have helped if you had increased the SIP value by an additional Rs. 1000 per year
Regular investing can be very rewarding in the long term. When you invest regularly, you allow your money earn more for you.
The above calculations are based on assumed rate of return and for illustration purpose only to explain the concept. It does not reflect the returns that may be generated by the schemes of Axis Mutual Fund.