Historical data shows that systematic investment can lead to long-term wealth creation. According to market experts, staying invested in the stock market for a longer duration can help investors generate substantial returns.
Systematic investment plans (SIPs) have gained popularity among retail investors in recent years. SIPs allow investors to invest a fixed amount at regular intervals, typically monthly or quarterly, in a mutual fund scheme of their choice.
One of the key advantages of SIPs is that it helps in averaging out the cost of investments. Since investments are made at regular intervals, investors can buy more units when the markets are down and fewer units when the markets are up. This strategy helps in reducing the overall cost of investments and mitigating the impact of market volatility.
Moreover, SIPs also instill discipline in investors by encouraging them to stay invested for the long term. Many investors tend to panic and sell their investments during market downturns, which can lead to losses. However, with SIPs, investors are less likely to make impulsive decisions based on short-term market movements.
Overall, SIPs provide investors with a convenient and disciplined approach to investing in the stock market. By staying invested for the long term and taking advantage of market volatility, investors can potentially achieve their financial goals.
Historical Data on Systematic Investment
Year | Average Annual Return | Investment Amount | Total Value |
---|---|---|---|
2015 | 15% | $10,000 | $11,500 |
2016 | 12% | $11,500 | $12,920 |
2017 | 18% | $12,920 | $15,233.60 |
2018 | 10% | $15,233.60 | $16,756.96 |
2019 | 14% | $16,756.96 | $19,102.30 |
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