If If you cannot take the risk of putting money directly in the stock market, then you can invest in mutual funds. Here your risk decreases a bit. If you are not able to invest outright, you can invest in mutual funds through SIP. In this, you can invest a small amount every month. Today we are going to tell you 5 such things, keeping in mind which you can earn good returns from mutual fund SIP.
1. Do not delay
One of the most important benefits of SIP is the power of compounding i.e. compound interest. The sooner you start investing, the bigger you will be able to prepare as big funds. In this way you will deposit big money from small investment.
2. Make the correct choice
Not all mutual funds are the same. Do research on different funds based on previous performance, expansion ratio and expertise of fund manager. Consider funds that matches your risk and investment goals, whether they are equity, date or hybrid funds.
3. Review Portfolio
Do not make a habit of forgetting by investing. Regular review of your SIP portfolio. This will help you change the portfolio. Look for funds that continuously perform better than your benchmark and if your current investment is poorly performing, then take out the funds and invest in another.
4. Stay disciplined
Market fluctuations can be disturbing, but being disciplined is the key to success in SIP. By continuing your investment during the market decline, you can buy more units at low prices, leaving the average of your purchase cost over time.
5. Gradually increase SIP amount
As your income increases, consider increasing your SIP amount. This step-up approach can help you take advantage of the capacity of mutual funds, as well as ensure that your investment keeps pace with inflation and your growing financial goals.
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