CAN YOU DO A SIP IN STOCKS

SIP IN STOCKS

Stock SIP (systematic investment plan ) is an easy method of investing in stocks. It enables investors to buy stocks (amounts/quantity based ) ,periodically (weekly, monthly ,etc. ) in a systematic way. It helps you to make the best of the unpredictable market by adopting a disciplined investment strategy. Mutual funds and other investment companies offer investors a variety of investment options including systematic investment plans.

SIP IN STOCKS

SIPs give investors a chance to invest small sums of money over a longer period of time rather than having to make large lump sums at one go. Investing in SIP enables an investor to take part in the stock markets without actively timing them and he/she can benefit by buying more units when the price falls and less units when the price rises. This scheme helps reduce the average cost per unit of investment through a method called Rupee Cost Averaging. With every investment in a SIP plan in India, additional units are added to your account depending on the market rate . With every investment ,the amount being reinvested is larger and so is the return on those investments. Moreover, it is at the discretion of the investor to receive the returns at the end of the SIP’s tenure or at a periodic interval.

SIP IN EQUITY

SIP investments can be started anytime ensuring minimum risk with the correct suitable plan for the investor. It is very important to choose a scheme which suits an individual ‘s long-term goals well. So, there is no suitable time frame within which an investor should start a SIP investment plan, the sooner the better. SIP in stocks allows investors to fix either the amount to be invested or the number of shares needed to be purchased at a regular interval. Like mutual funds SIP ,an equity SIP or ESIP allows investor to invest in stocks in a disciplined manner ,helps them spread their investments over time, and lets them benefit from rupee cost averaging ,thereby creating a sizable corpus with small investments .ESIPs are a good option for investors as one can get more stocks when the prices are low ,as compared with the tenure when the prices are higher. But one limitation of ESIP to be aware of is that it may not necessarily offer you the advantages of price averaging. One of the important rules of equity investment is buying at the right valuation but with systematic investments in stocks, one does not look forward at the valuations rather they look at the number of units he/she might be getting.

Just recently, the market has been volatile which made the investors highly impatient and concerned. During these unpredictable conditions of the market , the SIP method of investing in mutual funds is highly recommended. Similarly equity SIP is a way of making small investments in stocks periodically and thereby taking advantage of the fluctuating stock prices. Therefore , the ESIP mode of investment can be useful for direct equity investors. This mode can help abstain from timing the market ,invest with a systematic approach and stay in a safe position during unpredictable times.

However, it is essential to narrow down and make an informed decision while picking stocks for direct ESIP. The mutual fund SIP allows automatic diversification, but Equity SIP does not. Investors need to select organizations that are providing strong growth in earnings, proper governance, and ratios of high returns. Therefore ,it is recommended to have a thorough knowledge before choosing a stock to invest in.

STOCK SIP IDEAS

-Bajaj Finserv. 3 yrs Annual Returns. 62.42%

-ICICI Bnk . 3 yrs Annual Returns. 37.63%

-Reliance Inds.3 yrs .Annual Returns. 34.90%

-Larsen &Toubro.3 yrs.Annual Returns. 21.47%

-Indusland Bank. 3 yrs .Annual Returns.5.95%

-Maruti Suzuki.3 yrs.Annual Returns.1.43%

-ITC.3 yrs. Annual Returns . -3.98%

Above mentioned are some of the best SIP ideas .The funds shortlisted are purely based on 3- year annualized returns .Please note, some mutual funds are subject to market risk and require careful consideration before investing.

Systematic investment plan is considered as one of the safest and best ways to increase one’s wealth in today’s turbulent scenario. The basic rule to start investing in SIP is the early you start ,the better it would be. The longer you stay ,the more you are going to reap fruits of compounding .The consistency would pay you in the form of a mammoth mount.