Most people are now beginning to understand the benefits of investing in mutual funds through SIP. In October, foreign investors sold shares worth more than Rs 1 lakh crore from the Indian markets.
However, the market did not fall much because domestic investors invested almost the same amount in the market. Mutual funds invested the SIP money of retail investors in the stock market.
Now retail investors need to know those things about SIP, by paying attention to which any person can easily become a millionaire.
Start investing early, you will get the magic of compound interest
The biggest advantage of investing in a mutual fund scheme through SIP is the magic of compound interest. The sooner you start investing, the more you will get the benefit of compound interest. With the magic of compound interest, even an investment of a small amount can create a big fund in the long run.
Choose a good fund
You have to understand that the performance of mutual fund schemes is not the same. On the one hand, while some funds give huge returns to investors, on the other hand, some funds sink the money of investors. You have to choose a fund that has a good track record. By doing a little research, you can prepare a list of such funds.
Portfolio review is necessary
Many people invest through lump sum or SIP but do not keep an eye on the performance of their fund. By reviewing the portfolio from time to time, you get to know whether the return of your fund is good, normal, or bad. If the return is low, then you can withdraw money from that fund and invest it in a well-performing fund.
Continue investing despite market fluctuations
Many people invest in mutual funds through SIP but start worrying when there is a big fall. Before investing in shares or mutual funds, it is important to understand that the nature of the market fluctuates.
Therefore, you do not need to worry even if there is a huge fall in the market. You should continue your SIP. The market goes up after every fall.
Keep increasing the amount of SIP
As your income increases, you will also have to keep increasing the amount of SIP. This will give you the full benefit of the magic of compound interest. Also, enough funds will be created for your financial goals. Especially employed people, whose salary increases every year, should keep this in mind.