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How to maximize your mutual Fund SIP returns?

How to maximize your mutual Fund SIP returns?

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Mutual fund systematic Investment plans are very beneficial for financial planning. Due to growing awareness, there has been more participation of the investors in the mutual funds through the SIP routes. In this article, we will discuss how you, as a SIP investor, can maximize your returns:

  1. Start investing early and for a long duration – The key ingredients in wealth creation is not money but the time. Money is, when put to work for a longer duration, then it generates more profits. Profits again generate more profit and over the course of time, you end up creating a sufficient amount of wealth due to the compounding.
  2. Don’t worry during the volatile market – Share markets are volatile. Sometimes it can go down while sometimes it can go up. Nobody likes losses, but you must resist the urge to stop your mutual fund SIP. In fact, market corrections are the best time to invest strategically as long term benefits are significantly high.
  3. Increase your SIP with time – With the passing time, your income increases and so does the expenditures as with the rise in income, your lifestyle also improves substantially. By increasing your SIP instalments every year, you can accumulate great wealth. With long investment tenure, your money will multiply many times.
  4. Take advantage of a market correction – There is no denying that people have accumulated substantial wealth by investing in online SIP. However, the market also offers opportunities to invest in very low price and get high returns. If you want to invest in SIP mutual funds, then take advantage of the market corrections and invest the available fund in investing in a lump sum. Most of the investors are unable to take advantage of the market correction because they wait for the market to touch the bottom. It is very difficult to detect the right time even for the investors.
  5. SWP instead of complete withdrawal – Systematic Withdrawal Plan is a tool which is provided by the fund, which allows the investors to withdraw a pre-determined amount regularly. The tool allows the investors to meet their regular needs along with letting them stay invested in the scheme for a good long duration to get the maximum profit. The SWP also works as a tax minimiser tool which frees the investors to pay the dividend distribution tax.

In a nutshell, an investor can maximize his SIP returns by following the right strategies. Keep your funds invested for longer duration and keep increasing the funds every year is the key to get the maximum benefits from the SIP mutual funds. Don’t miss to take the benefit from investing at the cheaper valuation as and when the market poses the opportunity.