Tips to earn maximum returns on your SIP investment

All of us want to get good returns on our investments. With SIP and SIP calculator, everyone can invest in mutual funds. Some tips can help you to gain the maximum returns from your SIP investment.

They are mentioned below:

  • Set long term goals

Systematic Investment Plans are great for long terms. Setting long term goals is always beneficial for any financial investment. Systematic Investment Plans are all about regularity and discipline. If you regularly invest for a long time, you get great benefits. So, do set your long term goals, like retirement plans, child’s education, child’s marriage, and others, before you invest in Systematic Investment Plans.

  • Consider the risk factors

Your Systematic Investment Plans should be designed, looking at the risk parameters. All mutual funds depend on the ongoing market price. When the market fluctuates, your returns get affected to some extent. So, we must invest in SIP after understanding the risk factors and how much risk we can tolerate. A thorough analysis will give us better returns.

  • Selecting funds

Selecting the fund for one’s SIP can be difficult. You have to consider a few things before opting for any plan.

  • First, you need to check the AUM and pedigree of the selected fund.
  • Then you should check if the fund management team keeps changing frequently. The fund management team must stay together for a long period; this brings consistency to the policy.
  • The return performance must be checked. A policy must beat the Total Return Index.
  • Occasional underperformance is acceptable, but if a policy constantly underperforms, you should not go for that policy.

So these are some of the things, you should consider before selecting a plan.

  • Selecting between Direct and Regular plan

There are two types of Systematic Invest Plans; Direct plans and Regular plans. Direct plans have no entry or trial loads, so the NAV is quite higher than a Regular plan. When you opt for a Regular plan, you can seek the help of an advisor who will help you choose the right investment fund. If you are capable of selecting the right fund by yourself, you should go for Direct plans. They also have a lower expense ratio, and the returns are higher than any Regular plan.

  • Focus on the time

Some investors wonder if they should increase their investment when the market goes down and decrease the amount when the market goes up. Experts do not advise this strategy. Catching with the market fluctuation is very difficult with Systematic Invest Plans, and the profit you get is not worth the effort. SIP is mainly about the time, not the timing. You have to invest your money regularly for a long time to get great returns.

Thus, one can follow these tips to get better returns on their SIP investments. You can also use SIP and SIP calculator to calculate your returns and plan accordingly.

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