SIP, or Systematic Investment Plan – is a well-established investment method used in mutual funds. This method involves investing a fixed amount of money on a regular basis, usually monthly, in a mutual fund. By doing so, the investment is spread over a period of time, thereby averaging out the purchase price and minimizing the potential risk of investing at a market peak.
Moreover, SIPs offer an additional benefit by allowing investors to purchase more mutual fund units when the price of the fund drops, thereby maximizing the return on investment. In essence, SIPs provide a disciplined and structured approach to investing, which can be highly beneficial for investors looking to build a diversified portfolio with the potential for long-term growth.
