SIP which stands for Systematic Investment Plan is a popular way of investing among people here in India and most of the time it is said to be the most effective way to get returns at the maximum potential. But I am here to say that if you are investing in a Systematic Investment Plan it is not certified that you will get the maximum amount of return that the market can offer as the best option is something else entirely.
If you ask me what the best option is to buy something in the Stock Market then I will always say that BUY THE DIP which means that whenever a Stock or the entire Market goes down you go ahead and invest a chunk of money at one go and keep on doing that every single DIP. But the problem with this is that it is very very hard to calculate when the Market has hit its Bottom and in most cases even when you think the market has bottomed it still goes down so this process is definitely not a reliable one even though this will yield the maximum return if done correctly.
This is where Systematic Investment Plan shines as this creates no sense of urgency or keeping track of the market but instills one simple principle for the Investor which is DISCIPLINE. When you go the SIP route of the investment you simply create a Discipline of Investing a pre-determined amount every single month and nowadays you can just Automate everything where a set amount will get deducted from your Bank Account and get invested automatically. So yeah even though SIP is not the best route to get the maximum ROI but it is certainly the most disciplined manner to do so.
What do you guys think about SIP?
Posted Using LeoFinance Alpha
Ive been seeing articles about this strategy referred to as 'Dollar Cost Averaging'
https://peakd.com/search?q=dollar%20cost%20averaging&sort=best&since=all