SIP- When is The Right Time To Start One?

Published by Sharekhan Education | September 4, 2021

SIP- When is The Right Time To Start One?

The Sensex is on a rampage and is breaking its own records practically every day. The shower of sheer profits makes your heart miss a beat; but “Yeh Dil Mange More”. Who doesn’t want to make hay while the sun shines? Sushant too wanted to enjoy the hullabaloo of the market but, “is it the right time to start my SIP, now that the markets are giddy or should I wait for the markets to correct?” he wondered.

Sushant has a very genuine concern, with the markets in a runaway mood who can predict what will happen next. The current market highs may prompt many to jump in but investing a lump sum may prove dis-advantageous now. The best strategy to overcome such market volatility probably would be SIP.

SIP– Systematic investment plan is a facility offered by mutual fund houses to motivate investors to invest for their future. This involves investing periodically, a fixed amount in fund/s of your choice, generally monthly; though you can select from other available options like daily, weekly etc…

SIPscan help reduce the risk of investing all your money at market highsby building up investments slowly with regular, periodic investments over time; take rational decisions and keep emotions out of investing.

With SIPs market fluctuations work to increase your gains,you buy more units at lower prices & fewer at higher prices thus averaging your purchase cost per unit.This means that even if the markets correct after you initiate your SIP you don’t have to worry. Every market correction is an opportunity to accumulate more units which in the long term will help build you wealth. On the other hand postponing your investment decision to wait for a market correction may prove costly. You may be left waiting and lose an opportunity in the bargain.

If you are looking at investing in equity through the mutual fund route then starting an SIP would be just the thing for you. By investing the SIP way you take away the market’s power to upset you no matter how bizarrely it bounces.But do remember that it is important to ride one entire down cycle back to recovery to gain from SIPs.Also SIPswould not be an optimal strategy if the market does go straight up.

So if you ask when would it be the right time to start an SIP? We would say the right time to start your SIP is NOW.

By Enrolling yourself in this stock market course, a learner can learn the basics and the various aspects of trading in Futures and Options Trading.

Happy Learning……….