A SYSTEMATIC WAY OF MAXIMISING RETURNS ON INVESTMENT
01, Apr 2019
Prelims level : Economy – Misc. Mains level : GS III - Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
- A Systematic Investment Plan (SIP) is a way to invest in mutual funds wherein a fixed sum of money is put into a mutual fund scheme at a specified date every month.
- It is considered to be investor-friendly and an efficient manner of investing in the capital markets. From this, one can start investing with small monthly contributions instead of building a huge investment corpus.
- SIPs capture every rise and fall of the market and hence, an investor need not worry about the level of the market. there are sector-specific funds such as pharma, banks, technology, and also those based on the size of the companies such as large-cap, mid-cap, small-cap
- funds that allow the investor to have a diversified portfolio rather than concentrate risk in a few companies
- It is considered to be investor-friendly and an efficient manner of investing in the capital markets.