How Much To Invest In SIP?

SIP or Systematic Investment Plan is the key means to put money into a safe and reliable money growing ventures through which good returns can be reaped. The key benefit of SIP is that it offers so many types of investment opportunities, giving people the chance to put their money into various schemes through which it can grow and multiply in many different ways. 

Best SIP Plan to Invest | Image Resource: shutterstock.com

Types Of Mutual Funds

Knowing what type of funds are available helps to invest wisely into those funds through which your financial goals and objectives can be achieved.

• Money Market Funds - It is made up of short term securities like treasury bills, income securities, deposit certificates etc, gives low returns but a safe investment
• Fixed Income Funds - Made up of investments that gives fixed returns such as high yielding corporate bonds, government bonds and investment grade bonds. 
• Equity Funds - They comprise of stocks, have short investment period, carry high risk, but grow faster than other funds. Examples include value stocks, small-cap stocks, income funds etc. 
• Balanced Funds - Made up of fixed income securities and equities, are more risky than fixed income funds but less risky than pure equity funds. Their purpose is to balance high returns against risk of losing money
• Index Funds - They track a particular index's performance and the fund's value is likewise affected by the index value. 
• Specialty Funds - Is made up of investment into specialized assets such as commodities, real estate etc. returns are good and investment risk is low to moderate
• Funds of Funds - Investment into funds that comprises of various other funds, enabling the investor to get greater choice on  how they can invest their money and multiply it

By looking into the general features of these fund varieties, you can decide what is the best SIP plan to invest. 

Tips On What To Check Before Investment 

By looking into funds that have different investment styles, you can gain good returns because even if a particular segment is not performing well, its low returns will be made up by others that are doing moderate to good in the markets. This feature also helps you diversify beyond just investment type as you can access more investment avenues. The best SIP plan to invest is one that is performing well now and also shows signs of performing this way in the near future. 

Before picking up any fund for investment, look into how its returns will help meet your specific financial goals. For example, do you want returns that helps meet financial obligations such as college expenses, buying car, meeting home renovation expenses etc else is the returns needed for retirement purposes. So look towards a fund that can resolve such needs. 

Check up on the risk of a fund and how much of risk you are ready to take on. For example, is putting your money into a portfolio that has dramatic swings alright or do you want a more conservative investment means. Kotak Mutual Funds offers investment options with low to medium risks through which attactive returns can be gained. 

Finally, look into how long you don't mind putting money into investment. Is the money invested required for immediate and pending financial obligations else can you wait for a long period of time till It gives back significant investment returns. 

Gain High Returns By Investing Into Equity Funds

You can maximize gains from SIP investment with a little amount by putting money into Equity funds. Here investment is made into different company shares but each have a different market capitalization. You can enjoy significantly greater returns from them than what is obtained from money put into fixed deposits and debt funds.  Check out Kotak Mutual Funds for the best returns in both short and long term investment periods. 

This form of mutual fund investment is ideal for those who want to invest just a moderate amount of money per month, are having long term financial goals and who are ready to take on a bit of risk in their investment decisions for the benefit of a high returns at the end of the investment period.  

Those who are new to investing should look into large-cap  equity funds which put money into top 100 stock market companies, which deliver good returns over the long period. Investors who are already aware of the mutual fund scenarios can put money into more diversified mutual funds, which have the benefit of high returns plus low risk. 

In equity funds, investor money is put into company equity shares in different proportions. Here about 60 percent of the fund is put into such shares and the investment style can be either growth-oriented or value-oriented. The remaining 40 percent is put into money market instruments money marketing and debt instruments, which helps to bring down fund risk as well. All the buying and selling decisions of this fund is done by the fund manager, who takes decisions based on market scenarios so that investors can gain maximum returns. 

Key Benefits Of Investing Into Equity Funds 

• Invest a small amount for a period of three years and gain good returns when the investment period culminates
• Investment can be made conveniently into various types of equity funds at a low cost, thus eliminating the need for huge money to make equity investments
• As money is systematically invested, returns are high and the discipline of making monthly investment is gained
• Investment can be made through the services of a fund manager or directly online which is simple, easy
• Funds put their money into companies that offer various returns, which brings in diversification that offers good returns
• Lumpsum investment can be made for a period of time, if making monthly SIP is cumbersome  

Types Of Equity Funds Based On Market Capitalization

• Large cap - Investment is made into reliable large cap company equities
• Mid cap - Investment is made into well-performing midt to large cap company equities
• Mid and small cap - Investment is made into top mid and small cap company equities
• Small cap - Investment is made into best small cap company equities, which due to their small size can give back fluctuating returns
• Multi-cap - Investment is made into top,  mid and small cap equity companies

Kotak SIP Calculator – An Easy Way to Calculate Your Returns

Systematic Investment Plan or SIP refers to the different investment schemes provided by the mutual fund companies. A person who invests in SIP would have to invest fixed amount of money periodically (annually, quarterly, monthly or weekly) into the fund they have chosen. It is very beneficial for retail investors since SIP allows a passive and a disciplined approach towards investing which creates wealth in the long term (by the process of compounding). One of the great things about investing in SIP is, your investment in the mutual funds remain unaffected by the market volatility.

How does the Kotak SIP Calculator work?

Systematic Investment Plan is a great way of achieving your long-term financial goals. The Kotak SIP Calculator helps you in calculating the wealth gain and also the expected returns that you can achieve from your SIP investment. The calculator gives you a rough estimate of the matured amount for any kind of SIP investment that you do. This amount is calculated on the basis of an estimated annual return rate.

The Kotak SIP Calculator consists of different options and you’d have to choose each one of them. The first option is of course the type of investment you would want to choose. There are several different ones; you could take the advice of your financial adviser in order to make the right decision. You then have to input the installment amount that you would like to invest at every interval. The frequency ranges between monthly and quarterly. The last thing you’d have to input is the date when you are starting your SIP investment along with the end date.

Benefits from Investing In a Systematic Investment Plan

Investing in a SIP allows you to average your purchase cost while maximising your returns. Investing regularly in a SIP over a certain period of time regardless of the state of the market, allows you to get more units when the market is low, and get less units when the market is high. This helps in averaging out your purchase cost of the mutual fund units. 

Another benefit that you can reap from SIP is from the power of compounding. Investing over a long-term period and earn more returns from the returns you get off your investment. This is how your money would start compounding. This is helpful in building up a large aggregate for your long-term financial goals with small investments regularly.

Therefore, take the help of Kotak SIP Calculator in order to make an estimate of your returns and start investing in Kotak Mutual Fund right away!

Top 10 Mutual Funds for SIP For Safer and Higher Returns

Top 10 Mutual Funds for SIP | Image Resource: freepik.com

Are you interested in mutual funds? Do you want to yield good returns without burning a hole in your pocket? Then, SIP – Systematic Investment Plan would be the apt choice for you. For those who are not aware of this term, it is nothing but a disciplined investment method that allows clients to get beneficial returns. Most of the mutual funds SIP plans are designed to provide flexibility for the investors. These plans need to be researched beforehand to get the ultimate benefit. 

Types of SIP plans To Match Your Financial Goals

Before investing in any SIP plan, the client must spend time in researching. Since the market is a changing field, it is mandatory to know what type of scheme you are choosing and what benefit you will avail. If you are unsure as to which scheme to choose, you can always get help from your financial advisors about the top 10 mutual funds for SIP. Kotak mutual fund house offers various SIP plans for both short-term and long-term investors. There are many other fund houses that provide SIP plans and you can get details about them online. 

Some Tips on How to Choose Best Mutual Fund for SIP 

There are many systematic investment plans to choose from. Kotak Mutual Fund SIP plans are designed to cater to the requirements of every type of investor. There are also other firms that provide specific mutual funds for SIP. Before investing, it is mandatory to take into account certain factors. Some of them include 

• Aim of investment – before investing, it is a must to understand the need for making the investment. The objective for the investment can vary based on the individual. It can either be to purchase a car or to buy a house, etc. Whatever maybe the case, it is a must to set a financial goal before investing in SIP mutual fund. 
• Know about the funds – some investors blindly invest in any fund they like without having prior knowledge about the type of plan. One needs to understand the reputation of the fund house as they will be investing your amount in the market. Researching beforehand will help you understand about the fund house, the services provided and the plans offered by them. 
• Comparison is a must – another important factor that has to be considered when investing in mutual funds is the comparison of funds. One must research and compare the performance of the funds over the years and then choose the plan. You can do it easily at just the touch of a button or get help from financial advisors. 

Know How To Invest In SIP Directly

 How to Invest in SIP Directly | Image Resource : freepik.com 

Mutual funds offer a good investment option. You can invest in mutual funds regularly. Systematic Investment Plan (SIP) allows this. You can invest a fixed sum of money regularly in mutual funds through SIP.

You should have a goal to achieve and invest accordingly. Identifying your goals is a must. You should know how much to invest and for how long. This depends on the amount you want to collect at the end of the investment period.

You can either consult a financial advisor or invest directly. If you are investing directly without any help then you should get enough knowledge on how to invest. You should select the funds which help you reach your goals and suit your needs. Once the funds are selected you should decide on the SIP amount to be invested regularly to reach your goal.

AMCs like Kotak Mutual Funds offer registering for SIP online. They offer form online which you can fill and submit. This is how to invest in sip directly. For offline you can download the form, fill it and submit it to the AMC. You get a account confirmation statement after your first SIP. You also get confirmation statements for your subsequent installments monthly.

You can start you SIP on any date of the month. But the installments have to be done on the dates offered.

Increase in the SIP amount
You can increase your SIP amount any time. For this you have to submit
    • A SIP form filled and with the new SIP amount.
    • A written and signed confirmation of the discontinuance of the existing SIP.

There are other options available if you want to increase your SIP. One of the facility allows you to increase your SIP any time. You just have to give the instructions to increase the SIP amount. The process is hassle free. You only have to register for the facility. This gives you investment flexibility throughout the duration of the SIP.

Another option allows you to invest depending on the market valuation. The amount of SIP invested is more if the market is low and the regular SIP amount gets invested if the market is high. This allows you to buy more units when the market is low and this way you can make the most of Rupee Cost Averaging. It is an automated valuation based investing.

Kotak Mutual Funds offers you the facilities to increase the SIP amount anytime. The process is simple and convenient.

The Best SIP Mutual Funds That You Should Invest In

Best Mutual Funds for SIP  | Image Resource: freepik.com

Anyone who wants to help their money grow efficiently without putting too much of money at risk at once knows about SIP or Systematic Investment Plans.

However, if you are someone who has heard the word SIP thrown around here and there but never understood what it means, then you are at the right place. SIP is a plan with the help of which you can invest a fixed amount of money in a mutual fund after fixed intervals for a fixed or variable duration.

SIP Work Just Like A Piggy Bank For Better long-term Savings

You must have saved money in a piggy bank at some point in your life during childhood. Just as you could save up big by depositing loose change in your piggy bank. Similarly, you can earn a lot of money through SIPs.

With a SIP, you can deposit a certain amount of money, which might start from just Rs. 500 and can go up to any amount during a fixed interval. This interval can vary from a week to a month or even a quarter. This money, which is deposited builds up over time.

Unlike a piggy bank, with a SIP, it allows you to be able to invest your money in profitable businesses, and then share a part of the earning. 

Additionally, with every periodic investment, the amount of money which is reinvested increases, which means that the returns that you get on your investment increases, as well.

As the investor, it is up to you to decide whether you want to receive the interest that you gain on your investment directly at the end of the SIPs tenure as a lump sum amount, or whether you want to receive the small amount after the fixed interval.

While the inner workings of SIPs are a little more complex and challenging to understand, this is a general overview of the process. With this basic understanding of SIPs, you will be able to invest your money in a better way in any of the top mutual funds for SIP.

Where Should You Invest for the best mutual funds for SIP?

Learning about SIPs does not mean that you automatically know the best mutual funds for SIP. Where you invest has a lot of bearing on how much you will earn from your investment. 

To ensure that you invest your money wisely, you should look at some of the top mutual funds where investing in a SIP will help you earn large profitable sums. Whether you wish to invest in Kotak Mutual Fund or Axis Bluechip, ensure to know everything about SIP funds before you make an investment.

Here is the list of the mutual funds which are rated as the best in the market currently:

Kotak Mutual Fund:

This is an excellent SIP for those who are looking to get consistent returns on their investment. Established in 1985, this company has been working hard to establish a name for itself in the industry, and it is not difficult to see that their hard work has paid off.

Kotak Mutual Funds caters to a wide range of customers with varying risk appetites. No matter how big or little your investment is, you will find a theme for yourself. Before you make any investment in Kotak Mutual Funds, you need to have your financial goals in mind. Whether you are investing the money to attain a short term goal such as buying a car, or for a long term goal such as planning your retirement, you will be able to find a suitable scheme, with this company, you can invest mainly in large-cap companies, but at the same time you may opt to invest in small-cap and mid-cap companies. There is even an option to invest in multi-cap companies so that you can diversify your portfolio. Hence, you should head this way if you want to make a smart investment.

Axis Long Term Equity Fund

This mutual fund portfolio comprised of high-quality equity derivates and equity stocks. It focuses on achieving consistent returns on investment for their customers in the long-term through their portfolio. If you are looking for consistent returns on your mutual funds, then you should go ahead with this plan. It has been performing steadily well although it was launched only a decade ago, it has been able to climb the ranks in the mutual fund market effortlessly.

HDFC Small CAP Fund

Over the last year, this mutual fund has performed quite well. It has been able to curb losses and take them to an all-time low, which certainly makes it a worthwhile investment. Although up until last year, its performance had not been noteworthy, and it still needs some time to grow, there is no doubt that it will soon be able to climb the ranks to reach higher in no time. 

Thus, mutual fund mainly invests its assets in small-cap and mid-cap companies. It leaves a bare minimum of its assets for investment in large-cap companies. If that sounds appealing to you, then you should ahead with this plan to make your investment.

DSP Equity Opportunities Fund

Historically, this mutual fund has always maintained a diverse portfolio when it comes to investment. They want to provide appreciation in the capital investment of their consumers, as well as generate income while ensuring a dividend distribution. It has consistently invested in some of the top-rated equities along with equity-linked investment in order to achieve their objectives. Hence, with this mutual fund, you are sure to achieve a consistent return on your investment as well as attain the benefits of a diversified portfolio.

Mirae Asset Emerging Bluechip Fund

With a consistently good performance, this mutual fund will be a wise option for you to invest your money. It has improved its performance in the past year and is sure to do well in the future, as well. Most of its assets have been invested in large-cap companies, followed by mid-cap companies, only a small portion of its investments have been reserved for small-cap companies. Thus, it has a well-diversified portfolio which can work to your advantage.

These are some of the best mutual funds for SIP that one can consider investing. You can consider the one that can help you make the right selection for the investment and help you make the financial investment. 

How Secure Your SIP Investment this election?

The general election 2019 is around 6 months away, but many mutual fund investors actually are very much concerned about it. They’re bombarding the mutual fund managers and advisors with several questions like: `Do I need to make any changes to my mutual fund investments or what investment strategy should I make for the upcoming general elections 2019?’  “What my mutual fund's investment strategy should be ahead of elections is one common question that we get from the retail investors, when we interact to them around election time. General elections are to be held from April to May 2019 for Lok Sabha.

Kotak Mutual Funds have decided to have a close look at the SIP plans around some previous elections just to know whether mutual fund investors have to alter the investment plans before elections. We looked at BSE Sensex for 6 months around election time for past 5 general elections that were held at 1998, 1999, 2004, 2009, and 2014.

Here’s what we have found: The mutual fund market moved up in 3 elections in 1998, 2009 and 2014. Actually, in the year 2009, the market saw 2 upper circuits in one single day after election results were declared. Election results in the year 1999 and 2004 pulled down the stock markets. Benchmark index fell down by 11% on a day election results got declared in the year 2004.

Regardless of any upward and downward trend, the Sensex chart remained very volatile during election time. There is no wonder, the mutual fund advisors and managers ask the investors not to alter the SIP plans and strategies ahead these elections.

The general elections will happen in every 5 years. And, from 1980 to 2014, we have actually seen all types of governments, which include absolute majority government and mixed governments. The average GDP growth also stood at over 6.2 percent over 34 years. Suppose we keep this expectation in mind, and then elections don’t matter much to your SIP plans. Suppose our country grows to about 6% every year, then which government rules, doesn't matter much.

Most of the financial planners and mutual fund advisors point out that our country has actually gone through all types of disturbances, which includes the unexpected election results, trade wars, depreciating rupee, crude rates going high and more. They say that elections may act as the temporary dampener or improve sentiments in a short term, however in a long term, the investors do not have to worry about their SIP plans.

The long term investors do not have to worry and change the strategy because of general elections of 2019. Investors should follow the disciplined approach to their SIP plans and stick to the asset allocation. However, because of high volatility, it is not the right time to actually invest lump sum. Suppose an investor wants at 6 percent (GDP growth above 34 years) and 4 to 5 percent inflation, we don’t see it as the difficult growth rate you can achieve in your SIP plans. 

Thinking of investing in the mutual funds and build the retirement corpus, here’s what you need to know.

Conditions in which SIP Plans will yield good results

The SIP plans will ideally yield you positive results under the following conditions:

Bull and Rising Market: SIP plans will yield good results in either a rising or bull market as each new purchase, though made at the higher rate, is valued at a higher price. But, like seen earlier, in this case, it will be good to buy a whole investment lump sum instead of "averaging upwards" through SIP plans.

Volatile market condition: SIP plans must finally perform very well in the volatile but bull or rising market. It will be a market kind where "rupee cost averaging" will work very favorably for an investor as volatility will lead to the possible average price. Final increase or the bull market will make sure that an end price will be higher than an average price.

The market in the Median range corrects any downwards and moves up: It will be a case where SIP plans will perform very well and looking at all conditions better than the initial lump sum SIP investment. It is because an investor can get the help of an intermediate correction for "lowering his cost".

However, does it mean that SIP plans works in all market conditions? Possibly No. Let’s now check the market conditions in which SIP plans will not work. Thus, it is proved beyond any doubt that the SIP plans may not always be the best investment route. Thus, it is better we move forward and check out when will it be an ideal time to invest via SIP plans or when only buy this lump sum.

Final Verdict 

The SIP plans work on a principle of the regular investments as well as brings the power of compounding ahead. This removes uncertainty and tensions from the investment plan just by making it the mechanical boring procedure. It inculcates a habit of savings and doesn't encourage speculation or timing of the markets. These are all accepted and correct facts.

However, do not forget that SIP plans are just one method of investing in the mutual funds, it is the vehicle, not a final destination - it might pass through the bumpy roads or straight road – but it will lead you to the destination is the lesser or at times higher time period - and sometimes this might also not lead you towards your destination just by derailing your SIP plans. SIP is a method to get on to your investment vehicle and reach your destination – suppose vehicle you select is incorrect – then whichever way you get in- there’s less chance of reaching to your destination. Thus, next time when the mutual fund or financial planner or distributor tells you that the SIPs are the safest route of investment in the equities then keep in mind they aren’t telling lies – it’s the safest route not for an investor but for own selves.

Get Good Returns By Investing In The Best SIP Plans in 2019

Investing in SIP mutual funds has actually become quite popular nowadays. The mutual funds are created when many corporations' pool in the securities to make a fund. The biggest benefit of a mutual fund is investor will be able to minimize their risks by diversifying their assets. So, loss in one investment hopefully can be covered up by profits of another. The stock market will fluctuate suddenly and can cause heavy losses or high returns that depend on the situation. Diversifying your portfolio means reducing your risk of loss just by distributing all your investments than keeping your eggs in just one basket. This is precisely why the mutual funds provide wonderful investment goals.

What’s a SIP?

SIP is one specific amount that is invested for a long period at the regular intervals, normally on the monthly basis. With this method, the investor buys some units of the scheme at the pre-decided frequency. Systematic investment plans help the investors to participate in a stock market, prevent any need to time a market, and bring discipline to the investment methodology. Now, it is possibly done with the mutual fund investments as well. SIP or Systematic Investment Plans help you to invest the fixed amount each month or quarter. Therefore, it helps to spread our investments with time.

Features of Systematic Investment Plan 

For the long-term wealth formation in the equity market, you require long-term horizon and discipline that are inbuilt features of investing in SIP. Following features of the SIP will make this fit for the equity market.

Investment possible with the small amount of money invested often to accumulate wealth

The easy and disciplined way towards investment

Flexibility in the terms of Quantity or Amount based SIP

Flexible intervals such as Daily,  Weekly,  Fortnightly or Monthly basis

Based on Rupee Cost Averaging concept

SIP is quite beneficial and best investment option. Let us see why:

Discipline: More you invest, better will be your chances to get success in the long-term. It includes investing a little early on in life. But, it is very tough to form a habit. You might end up in over-spending and forgetting to invest. But, SIP will help to inject discipline and invest regularly. As SIP will automatically debit money from your account, so you do not have any chance to forget your investment.

Power of compounding: There’s one reason why you’re advised to invest very early. When you will make an investment, you will earn profits in terms of profits from the sale/dividends or interest payments. The first one will get credited in your bank account, and where they then will earn the interest. With time, you will make interest on the interest payments as well. It amplifies your profits. For this reason, many investors prefer to reinvesting the interests and profits instead of using this for expenses. But, SIP helps you to tap in this power of compounding just by increasing the duration of your investing, although it is in the small amounts.

Choose your investment: With SIP, you may tailor your investments that will fit your profile. Also, you can choose the scheme, amount you are looking to invest and a number of Kotak mutual funds units that you want to buy. Suppose you fix an amount in rupees, the number of units that you buy every month may change. In the same way, if you choose to buy the fixed units, the amount you will pay every month might differ. In any case, it will fit your bill.

Cost averaging: It is one key benefit of SIP. In a stock market, one thing that is very important is timing. Same stock or mutual fund will be available at the different rates on the consecutive days and months. SIP helps you to reduce the average investment cost. 

Small investors: Often, there’s the minimum threshold when investing in the Kotak mutual funds. It can differ from one fund to another. It can act as the barrier for the small investors. With SIP, you can start with as small as 500 or 1,000 Rs.

Best SIP Mutual Funds in 2019 

SIP is one highly efficient ways of investing in the Kotak Mutual Fund schemes. With SIP, you can automate your investments every month. You can also spread your Kotak Mutual Fund investments with time in the fixed monthly installments. Thus, you can easily invest a small amount every month at the regular intervals and accomplish your goals. 

The goals can be marriage, retirement planning, purchase of a car or house, can all be fulfilled just by taking a SIP route. Because of its investment style, systematic investment plan is the best tool for investing in the equities. It balanced pitfalls of an equity market. It makes sure complete stability during the turbulent market conditions. Some benefits of SIPs include: 

Power of Compounding 

Rupee cost averaging 

Builds the habit of the long-term savings 

Investors who are very keen on investing in a SIP, then Kotak Mutual Fund is the best option for the year 2019. The funds are shortlisted by undertaking some parameters like NAV, AUM, peer average returns, past performances, and more. 

Choosing Right Companies for Your Investment

When you've decided to go the SIP way, then the next question that comes up is a stock selection. Number one rule is going for the companies that you would like to own when given a chance. There are some stocks that are good for SIP way of investing. And these are the stocks we must accumulate, in the small steps since they represent the long-term value. They’re companies that have the proven track record. Such companies have the solid, ethical and stable management and function in the profitable area with the long-term prospects.

Conclusion

Suppose you don’t want to invest for equity SIP then you can select the Kotak Mutual Funds where you will be relieved of individual company research. Thus, the points mentioned will help you to opt for the right mutual funds and make a worthwhile decision.