Few days back we wrote about the state of India economy and the bad phase our economy is undergoing. The impact of it is very evident by the way stock markets have been performing especially the equity funds. There is a wave of withdrawal in the markets and people are closing their SIP’s in a rush.
If we talk of SIP’s – SIP as a mode of investment helps in two ways.
- It enables you to save month on month and these regular savings helps to accumulate money over a period of time.
- SIP in equities also helps in Rupee Cost Averaging i.e. where we buy less units when markets are high and more units when the markets are low. This not only helps to reduce your purchasing cost but also give returns in long run.
