HOW CAN A SIP INVESTMENT INCREASE?
Investors can increase their monthly SIP contribution by adding money to their existing mutual plan or choosing a new fund for their portfolio. They can schedule the additional amount on the date of the existing SIP or any other convenient date. Choosing different dates helps spread the investments throughout the month.SHOULD INVESTORS ADD A NEW SCHEME, WHILE INCREASING THEIR SIP amount?
Investors should build their long-term vision Mutual fund depending on age, risk-taking ability and long term goalsThey should follow a asset allocation Focus and diversification in equities, Fixed incomeGold and REIT/InvIT. They could use a mix of active and passive funds to build their portfolio. While the core portfolio should be in long-term oriented fund categories, they could have a few thematic or sector funds in their satellite portfolios for alpha generation. Take the case of an investor with a SIP of ₹10,000 per month, of which ₹8,000 is in a flexi-cap or multi-cap fund, ₹1,000 each in gold and fixed income. If the investor wants to park an additional ₹2,000 and has a high risk appetite, it can be in a thematic or sector fund, while if it is conservative, the SIP can be in a hybrid fund with low equity content. If the investor does not want to add more schemes, the money can be split between the existing schemes.
THERE ARE A LOT OF NFOS And many look attractively positioned. Should we start taking a sip from them?
Investors should not get carried away by new fund offers (NFOs) as many of them are launched by fund managers to complete their product portfolio. They should opt for an NFO only if such a product is not available with any fund manager or if there is a compelling proposition that fits their portfolio. It is better to choose a fund to start an SIP from among the existing schemes as they have a track record and the portfolio details are available.
WHAT ELSE SHOULD BE CONSIDERED BEFORE STARTING A NEW SIP?
Investors should remember that the basic principles of investment apply to new SIPs as well. Equity fund Investors should have a time horizon of at least 5-7 years and not be intimidated by volatility in between. If they need money in 1-2 years, they should not start a new SIP in an equity mutual fund but opt for a fixed-income fund or a hybrid fund.
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