SIP Is The Preferred Method Of Mutual Fund Investing Among Young People: Here’s Why

SIP Mutual Fund: Mutual funds have seen an inflow of more than Rs 12,000 crore in the last four months. A large number of new investors are signing up for the Systematic Investment Plan (SIP) to build long-term wealth with monthly flow in the mutual fund industry.

According to the latest data from the Association of Mutual Funds in India (AMFI), mutual funds have seen an all-time high inflow of Rs 12,693 crore via the SIP route.

Also, SIP is a great way for people to keep saving as a habit; this is especially important for millennials and GenZ who find it difficult to save money.

Why do young people invest in mutual funds through SIP?

Today’s youth between the ages of 19 and 30 prefer mutual funds via SIP as a preferred investment option.

When asked why he prefers to invest in mutual funds through SIP, Lavkush Singh, 22, said: “Investing in mutual funds through SIP is an easy and sufficient investment method for me as a beginner. It does not affect my income since it is a monthly payment system nor does it imply high risks as an investment. Paying monthly helps generate savings at regular intervals. It is a form of constant investment that little by little helps the growth of my savings and, being managed by experts, gives a sense of guarantee and tranquility.”

Young people think that mutual funds through SIP are a safe and reliable option. “Mutual funds through SIPs are a great way to invest as they are safe for the long term and are reliable,” said Meghna Tiwari, 29.

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For some, SIP is a disciplined method of investing, “I invest in mutual funds through SIP because I don’t have the time or experience to pick the right stocks and SIP helps me invest in a disciplined and consistent way,” said 22-Nelson Mathais, one year old.

What is SIP?
A Systematic Investment Plan (SIP), more popularly known as SIP, is a facility offered by mutual funds to investors to invest in a disciplined manner. The SIP facility allows an investor to invest a fixed amount of money at predefined intervals in the selected mutual fund scheme. The fixed amount of money can be as low as Rs. 500, while the predefined SIP intervals can be weekly, monthly, quarterly, semi-annually or annually. By taking the SIP route to investments, the investor invests on a limited time basis without concern for market dynamics and benefits in the long run due to averaging cost and compounding power.

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