How you can start your SIP journey
Author : Quantum AMC | Published On : 09 May 2021
It is not uncommon for an investor to ask this question- can I achieve my goal by investing in SIP. SIP helps you to invest regularly in mutual fund schemes starting with a minimum of Rs. 500. Keep your investments staggered in SIP mutual funds to achieve your goals over a period. A Systematic Investment Plan for beginners is a simple and easy investment solution provided by mutual fund companies.
Step 1 – Identify and assess your risk appetite
Before stepping into the world of SIP or investments in general, assess your risk appetite and based on your age, income and other criteria. It is essential for an investor to estimate their risk profile. For example, as you become older, you are burdened with many financial liabilities, thus reducing your risk appetite. SIP is a simple way where you can start your investments if you are an amateur. The key is to start early, at the start of one’s working life, as you can take higher risk, and with the high risk you get chances of high returns. But it is most crucial to analyze this factor to develop effective risk mitigating strategies.
Step 2 – Recognize your specific goals
Once you have gauged your risk appetite, you need to evaluate your investment’s main purpose, which means what you are expecting from an SIP investment to fetch you over a period of time. In other words, you need to understand your investment objective and set your goals accordingly. SIP helps you plan just that.
For instance, individuals who intend to plan their retirement by routing their mutual fund investments through SIP may opt for an investment portfolio with diversification in various asset classes as per equity, debt, gold and others.
Step 3 – Choose a SIP mutual fund based on qualitative and quantitative factors
There are multiple Mutual funds schemes available for SIP in the market today, but make sure you choose the right SIP as per step 1 and step 2 given above. Risk appetite, financial goal, the performance of the funds, the credibility of the fund house, fund manager track records and most importantly, perform due diligence on the investment portfolio or you may seek help from an investment advisor. Always remember past performance or a star performer may not always prove to be the best fund!
Step 4 – Set a convenient timeline and date
The SIP allows you to opt for an auto-payment option eliminating the need to make periodic investments. However, you need to choose a convenient date before commencing the process. Please keep in mind that you may select multiple dates to route your investments through SIP each month as per your convenience, then decide a time horizon for your SIP investment. Typically, the SIP investment horizon is pre-determined based on your financial goal and investment amount. You can choose to use an SIP calculator to make your investment decision easier. You may choose an offline or online process for opting in SIP investment.
The following steps will resolve the question of how to start SIP investment for beginners via an online facility
How to invest in SIP online
- Complete the KYC process – Using the SIP procedure given below
- All the necessary ID proofs need to be submitted,.
- Commence the KYC process
- You need to then complete in-person verification
- Register your SIP
- Choose your SIP Mutual fund as per your suitability
- Select the amount
- Choose your SIP option like daily, weekly, monthly etc. set the date
- SIP will start after a month of completing the process and verification.
Disclaimer: The views expressed here in this Article / Video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The Article / Video has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of the Article / Video should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments. None of the Quantum Advisors, Quantum AMC, Quantum Trustee or Quantum Mutual Fund, their Affiliates or Representative shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary losses or damages including lost profits arising in any way on account of any action taken basis the data / information / views provided in the Article / video.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.