Mutual Funds: SIP will give huge profits, but understand these 4 things carefully before investing.

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If you want to start investing in mutual funds through SIP, then you should understand some things clearly so that there is no scope for regrets later.

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In today’s time, Mutual Funds have become a popular means of investment. This is because mutual funds are flexible in many ways. You can start investing in mutual funds through SIP with a small amount and increase or decrease according to your income. Also, long term investment in it gives better returns, which is much better than any other scheme.

Although because it is market linked, there is no guarantee of returns in it, but in the long run its average return is considered to be 12 percent. If you also want to start investing in mutual funds through SIP, then you should understand some things clearly so that there is no scope for regrets later.

Don’t start without research

Before starting to invest in SIP, do your research thoroughly. Investment started without research can lead to loss. If you do not have an idea, you can take help from an expert in financial matters. Also keep in mind that no one can guarantee you returns in this. Of course, better returns are available through SIP, but since it is market linked, it carries some risk. Whatever calculation is done regarding SIP, it is an estimated calculation based on its average return.

Start SIP with target

If you are starting SIP then start it with a target. For example, for your child’s marriage, education, your retirement fund, for what purpose you are starting this, you will have to be clear in your mind. To fulfill that objective, how much money will have to be deposited, for how many years the SIP will have to be run, calculate all these and then start SIP. If you do not start it with a goal, then you can withdraw the money anytime if needed and this will cause you loss.

Do not stop suddenly

If you have started SIP then do not stop it suddenly. When many people see a boom in the market, they get excited and start investing in SIP and if there is a recession, they get disappointed and stop it. But let us tell you that by starting and stopping SIP sometimes, you will never be able to reach your goal. Due to this you will not be able to get better returns and you will have to suffer loss. Therefore, once you start SIP, continue it continuously until your goal is achieved.

Do not start SIP with big amount

Do not start SIP with huge amount. There is no direct harm in SIP of large amount, but if there are any financial challenges in future, then it may be difficult to continue the large SIP. In such a situation, the investment sequence will be broken and you may have to bear the loss. Therefore, instead of starting a SIP of a large amount, it is better to start two or three SIPs of small amounts.

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