SYSTEMATIC INVESTMENT PLAN
The basic mantra of investing is to "Buy Low" & "Sell High", and that's what SIPs are designed to do - provided, you keep investing even if the Markets declines. SIP is a smart way to create wealth. It doesn't demand lump sum investments. Just a little, every month. What's more? With SIP, you don't need to time the market .And over a long period,your investment averages out the market highs and lows. Hence you buy more units when the market is low and less when the market is high. SIP is truly small on savings and big on benefits. So, develop a good habit of regular savings. SIPs are similar to R/D A/c of Post office or Bank but deliver far better returns as its NAV or market value fluctuates and it ensures that when NAV was low, you end-up purchasing more number of units.
The normal tendency is to invest more when prices are high and to stop investing when prices fall. This is the opposite of what is the most profitable way of Investing! SIPs force you to follow the opposite approach; this is the real value of SIPs & also benefits you due to Rupee cost average, power of compounding ,no need to time the market, regular and disciplined approach.