TOP 5 ADVANTAGES OF EQUITY SIP.

Investment is a very essential for building a wealth and people need to do it with very discipline and systematically method. Nowadays, we all need to save 10% to 30% of our income in any investment schemes. Recently stock market performing well after corona and on 13th August 2020 Indian stock market cross 55000 landmarks. Here I am taking about STOCK SIP or EQUITY SIP in this article.

Equity SIP, like Mutual Fund SIP, is a particularly developed investing method that allows investors to invest in equities and equity indexes. It differs from typical stock market investments in that it provides specific benefits.

What is Equity SIP?

We are all know about SIP, and Equity SIP stands for setting up  a regular investment plan to invest in the equity market, as investor do for mutual funds. The result is building a wealth systematically average method system with minimizing a market risk over a period.

(also read:UTI Focused Equity Fund NFO, Nippon India Flexi cap Fund)

Equity SIP allowing investors to invest in stock market on regular basis. Now, many brokers are suggesting their client's to invest in stock SIP's through their platforms. Equity SIP's allow investors to put their funds in shares, index exchange-traded funds (ETFs), and gold exchange-traded funds in regular manner. Investor can invest their funds monthly basis instead of lump sum.

Because it invests substantially in high-yielding shares and stocks, as well as other traded commodities, equity SIP's can provide greater returns on investment than mutual funds.

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Advantages of Equity SIP

1. Reduces Risk because of Rupee Cost Averaging.

Rupee cost averaging is an approach in which investors invest a fixed amount of money at regular intervals. Investor now can enjoy rupee cost averaging benefits through Equity SIP's. Investors can invest their fund  monthly, weekly, and daily basis and avail stocks on different prices which provide them levarage of rupee costing averaging.

     2. Starting with small investments.

Investor can buy stocks on small investments with Equity SIP and build up their wealth systematically.

    3. Timing the market is not necessary.

With the Equity SIP's, investors do not have to watch the stock market every day and there is no need to depend on their brokers to provide them buying selling calls. 

    4.  Long term financial goal can be aligned with  Equity IP.

Investors can fulfil their long term financial goals with small investments by Equity SIP's like purchasing new car, home, children's education fees, and expensive world tours.

    5.  Disciplined approach towards Investment helps to control the emotions. 

Market volatility brings forth a range of emotions among investors. When the market runs up, there is a sense of excitement and euphoria among investors. And when it corrects, initial denial   gives fear and panic. But in Equity SIP's investors has no need to worry about correction in market due to systematic investment plan, investors kept going to invest their money in correction time to, and it will give them more profit  earning opportunities.