SIP – Systematic investment Plan – Let us understand it better

This is most used word and popular among the mutual fund investor and industry. It is good to know more about SIP and invest in this route. But unfortunately, off late, it is either misunderstood or less understood. It is myth that all SIP’s will give positive return

To understand the SIP concept, click the below link (This article is In Tamil)
https://radhaconsultancy.blogspot.in/2016/05/systematic-investment-plan-sip.html

In the following link, there is a good article in Economic times which is available for those who are interested to learn more about it. To read the complete article use the below link

http://economictimes.indiatimes.com/wealth/invest/are-sips-the-risk-free-formula-for-making-money/articleshow/56700651.cms

Here is a quick summary:

• There is no guarantee all SIP will give positive return. 
• SIP performance is purely based on markets and underlying scheme assets quality. 
• For a short term, in the falling market, SIP may give negative returns. 
• In the rising bull market, SIP returns will be lower than point to point return for the same period. 
• Sip will give better return in the listless market or sideways market. 

More info with data are available in ET article link given above.

SIP’s are process and not the scheme. Lot if people think it is a scheme – but it is not. SIP can be done in any scheme like equity, debt or hybrid – again we have to choose the suitable AMC and schemes which suits our requirements.

In SIP also there are more variation. -click here to see the excel file showing these different type of sip/stp

• Fixed SIP 
• Variable SIP 
• Flex SIP 
• Top up SIP 
• PE SIP /STP

Fixed SIP are better in certain circumstances. Flex sip will help to get units in less average price, but in long run, amount invested may be low in raising market. Hence the total corpus may be low, even though return is high – to read more click below

http://economictimes.indiatimes.com/wealth/invest/does-flexi-sips-help-build-a-bigger-corpus/articleshow/56700134.cms

The following link shows, increasing SIP amount every year, depending upon your cash flow. This will help you to get more corpus at the end. This is based on concept of Top up SIP which is available with some AMC.

http://economictimes.indiatimes.com/wealth/invest/heres-how-an-increase-in-sip-helps-to-save-more/articleshow/56700524.cms?from=mdr