MUTUAL FUND / SIP
A mutual fund pools money from many investors to collectively buy a diversified portfolio of stocks, bonds, or other securities, managed professionally by a fund manager who invests according to the fund's specific goals, offering diversification, professional oversight, and accessibility for investors to grow wealth without needing to pick individual assets. Investors own "units" in the fund, sharing profits or losses proportionally, making it a convenient way to invest in the market with smaller amounts.
How it works
- Pooling Money: Many people contribute money into a single fund.
- Professional Management: A fund manager uses this pool to buy securities (stocks, bonds, etc.) based on the fund's objective (e.g., growth, income).
- Diversification: By holding many assets, risk is spread out, as not all investments move the same way at the same time.
- Units & NAV: You get units representing your share; the Net Asset Value (NAV) shows the per-unit price, calculated daily.
- Returns: Profits (or losses) are shared among investors based on their units, after expenses are deducted.
Key benefits of SIP and Mutualfund for more details call your advisor and select your SIP investment plan for choice 
- Diversification: Reduces risk by spreading investments across many assets.
- Professional Expertise: You benefit from expert fund managers' research and decisions.
- Affordability: Allows investment in a broad portfolio with small amounts of money.
- Liquidity: You can typically sell your units and get your money back easily.
Types of funds
A SIP (Systematic Investment Plan) is a disciplined way to invest in mutual funds by putting a fixed amount of money at regular intervals (like monthly) instead of a large lump sum, helping build wealth gradually, average out market volatility (
rupee cost averaging), and leverage the power of compounding for long-term goals. It's like setting up an automatic saving plan where small amounts are consistently invested, making investing accessible and less stressful.
How SIP Works
- Fixed Amount, Regular Intervals: You decide on an amount (e.g., ₹500) and frequency (e.g., monthly) to invest.
- Automatic Deduction: The amount is automatically debited from your bank account and invested in a mutual fund scheme.
- Unit Allotment: You get more units when the market is down (low price) and fewer units when the market is up (high price)
Key Benefits
- Discipline: Fosters regular saving and investing habits.
- Rupee Cost Averaging: Reduces risk by averaging your purchase cost over time, removing the stress of timing the market.
- Power of Compounding: Reinvested earnings generate further returns, leading to significant wealth growth over the long term.
- Flexibility: Can start with small amounts (even ₹100) and adjust the amount or frequency as needed.
- Long-Term Wealth: Ideal for achieving goals like retirement or education, leveraging compounding over years.