SIP News: We always look at SIP i.e. Systematic Investment Plan as a savings. We deduct a small amount every month and invest it for years and then get interest on it, which keeps our future safe. But there is another aspect to it, that is, whenever the stock market falls, this SIP becomes our biggest support. Let us tell you how?

Market decline is a big opportunity
In fact, whenever there is a sharp decline in the stock market, investors get nervous. At that time, everyone sees the value of their mutual fund portfolio decreasing and decides to stop or stop SIP. But this should not be done, because the period of decline in the market is like an opportunity for those investors who invest for a long time.

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The biggest advantage of SIP is that you invest a fixed amount every month, whether the market is up or down. When the market falls, the NAV (net asset value) of the mutual fund also falls. In such a situation, your same SIP amount buys more units than before. That means you get more shares at lower prices. If we understand this in simple language, then during the fall in the market, you are “buying cheap”. Later, when the market improves, these extra units help in increasing your returns.

Why is XIRR important for investors?
Most investors use CAGR to see the performance of their investments, but in SIP, money is invested at different times every month. Therefore XIRR is considered more accurate for SIP. It gives accurate returns keeping in mind the date and amount of each installment.

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understand with example
Suppose two people have done SIP of Rs 10,000 per month at the same time. As soon as the market fell, the investor continued his SIP and the other investor stopped it and started again when the market became normal. So in such a situation, the investor who continued SIP during the fall bought more units at a lower price. After the recovery in the market, his portfolio reached around Rs 2.51 lakh and its XIRR was around 49%.

Whereas the portfolio of the investor who stopped SIP was around Rs 1.46 lakh and his XIRR was limited to around 27%. This means that investors who continue investing when the market falls get more benefits.

Wedding SIP: Do you also dream that your wedding will be royal and grand? Do you also want to have a destination wedding like the celebs? Or do you also want to wear a designer lehenga in your wedding like the celebs? So this also requires a lot of money, where will it come from? This is not a difficult task but very easy. For this, it is necessary to have a little understanding and a routine. Let us tell you how.

How to save money for marriage?
Nowadays the expense of marriage reaches lakhs of rupees. In such a situation, many people take loan for marriage or exhaust their savings. But if you want to save your savings and do not want to take a loan, then you should start investing from now on. For this you can take help of Wedding SIP. This will be easy and you will not incur too much debt.

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How will Wedding SIP work?
Everyone has to get married sometime or the other, in such a situation, suppose your marriage is to happen after 10 years and Rs 20 lakh is required for it. If you start investing in SIP every month from now and get around 12% annual returns, then you can save lakhs of rupees for your marriage.

Even if you have been married for 5 years, you can still save around Rs 5 lakh. For this you will have to invest around Rs 2500 every month in SIP. This is not a huge amount, but it can definitely cover your wedding expenses.

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Which expenses can be covered?
If you are a bride and have deposited Rs 5 lakh through SIP, then you can bear the expenses like your wedding clothes, jewellery, make-up for every function, shoes and slippers etc. yourself. By doing this you will not have to worry about anything and it will not put too much burden on the family.

So if you are a groom, then there is no expense for clothes and jewellery. But you will be able to bear the burden of facilities like catering or booking the hall for your wedding yourself. Or with this you will also be able to go on honeymoon after marriage.

SIP Mutual Fund News: Nowadays everyone does SIP for their bright future. This formula always seems simple. Start a mutual fund SIP, stay invested for 10 years, ignore market fluctuations, and the wealth will grow automatically. Simply put, ‘SIP is the future’, financial experts fully believe in it. Social media calculators make the money process automatic.

A person starts a monthly SIP of Rs 5,000 in different equity mutual funds. After a few years, the stock market crashes. The value of the portfolio falls. There is an atmosphere of panic in the news. Suddenly, continuing with SIPs seems absurd. But the investor still continues investing.

Investing does not guarantee becoming rich!

More mutual fund units were purchased when prices were low, leading to better long-term results when the market eventually recovered. However, experts warn against a big misunderstanding. 10 years can improve your chances. However, it does not guarantee becoming rich.

One thing to note is that, if you think that by investing through SIP for 10 years, profits are automatically assured, then experts say that this idea needs to be brought face to face with reality.

What did the expert say?

Adhil Shetty, CEO, BankBazaar, says, ‘Staying invested in an equity SIP for 10 years significantly increases the chances of getting positive returns, but it should not be considered a guarantee of profits.’ Also, equity markets are linked to fluctuations, global events and investor sentiments.

According to Shetty, what works in favor of SIP investors is long-term investment and rupee cost averaging. By making a similar investment, you buy more shares when the market falls and less when it rises. This naturally averages out your purchase costs over time.

Inflation playing important role in SIP

Even if your SIP amount keeps increasing, inflation gradually reduces purchasing power. In such a situation, if the prices of essential commodities continue to rise, then even a portfolio giving 10-12% returns will not look extraordinary. This is the reason why. Experts recommend increasing SIP contributions gradually with salary increases, regularly reviewing the portfolio and maintaining low risk. According to Kumar Bineet, the success of SIP depends not only on timing but also on many factors like asset allocation, consistency, expense ratio, valuation and investor discipline.

Patience will be beneficial, nervousness will cause harm

Different experts have different opinions regarding SIP. However, one thing became clear. 10 year SIP is not a shortcut to becoming rich overnight. This actually gives market fluctuations and interest a better chance to do their job. Some investors can create substantial wealth. At the same time, some investors may get disappointed if they choose a bad fund, stop investing midway or lose patience in difficult market conditions.