How Can You Maximise Your Mutual Fund SIP Returns
Thanks largely to the efforts of financial advisors and investments awareness programs of asset management companies (AMCs), retail investor participation in mutual funds through the SIP route has increased manifold in the last few years.
1. Start early and invest for long periods
The most important ingredient in the wealth creation recipe is not money but time. Money when invested is put to work and the longer it works, the more profits it can generate. Profits invested generate more profits and over the long investment horizon you can create substantial wealth.
2. Remain disciplined even during volatile markets
Stock markets are volatile – ups and downs are part of equity investments. Sometimes markets can be extremely volatile correcting 20% or even more. We understand that volatility can be stressful because no one likes to see losses. However, you must resist the urge of canceling or stopping your mutual fund SIP (systematic investment plan) in market corrections.
3. Increase your SIP periodically to boost your wealth
Increasing your SIP every year is not a complicated process. Most mutual funds offer SIP Top Up or Step up facilities, whereby you can increase your SIP by a fixed amount or fixed percentage every year.
4. Tactically take advantage of market corrections to invest in lump sum
If you are investing through SIP in the best mutual fund scheme and have funds available to invest a lump sum, take advantage of market corrections tactically, by investing a lump sum in the same scheme.
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