Is your SIP Immune Against Disruption?

What is Systematic Investment Plan (SIP)?

SIP is an investment strategy where you invest a fixed amount of money at regular intervals. This strategy works well for individuals who want to invest in the stock market but don’t have a large amount of savings. The idea behind this strategy is to average out the cost of investment by buying units at different prices.

Advantages of SIP.

• Disciplined Investment: SIP helps you to invest regularly, which can be a great discipline for your investments.
• Averaging Out: By investing a fixed amount regularly, you average out the cost of investment, reducing the impact of market volatility.
• Long-term Investment: SIP is a long-term investment strategy, making it ideal for individuals who want to create wealth over the long term.

Disadvantages of SIP.

• Less Control: With SIP, you have limited control over the investment, as you can only choose the amount to invest and not the asset price.
• Potential for Lower Returns: By investing a small amount regularly, you may miss out on potential gains that a Lump Sum investment could generate.
• Averaging Out: Averaging turns into a disadvantage when the Market suddenly collapses after a Continuous uptrend for a longer period. Just like what happened in 2020.

How Advantage can become a Disadvantage?

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