Investing in Mutual Fund? Choose the Right Way to Begin

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Once you have decided to invest in a mutual fund scheme, next, you have to determine how you want to do it. You want to put the money in one shot, or wish to invest regularly over a number of years by way of Systematic Investment Plan (SIP). We know making a choice between them is quite a difficult task, and we have tried to simplify it through our earlier writing “Confused Between SIP & Lump Sum? Here’s a Solution!”

In this blog post, we have tried to help you find the way of choosing between SIP and a lump sum on the basis of different elements. Have a look at them!

1. The Flow of Cash - The salaried individuals get their salaries every month while the income of a non-salaried individual is irregular. For example, if you own a hotel, your income for every month cannot be the same. It fluctuates as per the customers. In the case of SIP, one is required to put in a particular sum regularly; a salaried person can manage to do it better than a non-salaried one. So, if you earn a fixed salary, SIP is a better way of investing for you.
2. Starting Out - If you are beginning up with your career, you would definitely want to enjoy your financial independence and would spend a lot. But, savings must not be forgotten. We don’t say to put aside a big chunk of your income, but making a start with a small sum isn’t a bad idea, right? For you, a small SIP can be a great choice of investment.
3. Windfall Profit - Many of the salaried or other individuals often receive bonuses, lottery wins, etc., apart from the regular income. Such amounts bring a chunk of money and starting an SIP with such amount will simply let it remain idle in the bank accounts with no benefits. Making a lump sum purchase would be the best way to use such amount in order to gain maximum and additional returns.
4. Goals of Investing - A long-term investment is often recommended by the experts, but some investors do have a short-term goal to be achieved as well, like buying a car in three years or going for a vacation. A lump sum investment in such a case is proved to be beneficial as it ensures that the invested capital is put to work for you right away. The SIP investments start working progressively and may be too slow for the short- or medium-term goals.

Although making an investment in mutual funds is a critical task, but once you understand its essence, it is not more than shopping online. We, at MySIPonline, aim to build-up your knowledge and assist you in making a right choice for your future financial requirements. You must avail our services and get in touch with our experts to be a prudent & smart investor.