5 SIP Investment Tips to Maximize Return Potential

5 SIP Investment Tips to Maximize Return Potential


Mutual fund investments can either be made in a lump sum or through a systematic investment plan (SIP). SIPs are preferred even by young, first-time investors because they require you to invest only a fixed amount every month. It makes them convenient and safe.You can also opt for online mutual fund investment and enjoy the returns while sitting at home. That is why SIPs are considered one of the most affordable ways to invest in mutual fund schemes.

Advantages of SIPs

SIP can be beneficial because of the rupee cost averaging, wherein you can purchase more units at a lower price and decrease the purchasing when the price of units increases. It helps in averaging out the total cost of your units and minimizes the impact on your investments due to short-term market fluctuations.

Another advantage of SIP is that you can enjoy good returns. However, you need to have the right knowledge to optimize or maximize the returns. You should do your research and consult with your fund manager before buying or selling units.

5 Tips to Maximize Your Returns

#1: StartInvesting Early

The moment you start earning is the moment you should start thinking about your financial planning. And, investing in SIP can turn out to be a fruitful decision for your financial plans. It can help you generate an adequate corpus to achieve your long-term goals. So, the more prolonged time you give to this investment, the more chances are you will have a higher corpus with compounded returns.

#2: Choose Funds After Careful Research

If you are aiming for maximum profit from your investment, you need the carefully pick the best performing plan. You need to figure out your risk-taking capacity, goals, and investment horizons. Apart from this, you should consider other subjective parameters including your fund manager’s experience, expense ratio, and the selected scheme’s consistent performance. A well-researched investment will increase the possibility of the best returns.

#3: Choose a Direct Plan

If you are confident that you know the process of choosing the best mutual funds scheme for investment, choose a direct plan. It has a lower expense ratio and may give you 1-1.5% higher returns than the regular plan. With no brokerage fees of advisors involved, your plan’s NAV is always higher than regular.

#4: Boost Your SIP Periodically

You should save more and invest the saved money into SIP as your income increases. You can generate higher returns from variable SIP than constant. Another helpful tip would be to always add a specific amount to your SIP overtime to stay ahead of inflation.

#5: Track Your Investments Regularly

It is difficult to predict market trends. You often choose a scheme based on the fund’s track record and its past performance. However, it is important to monitor the performance of the scheme continually. You should make changes if you find it possible that the fund may not perform well in the coming days.

You can try these straightforward SIP investment tips to maximize return potential. SIP is more about consistency. You cannot exit the market after getting a hike in your investment market value. You need to build wealth by being consistent in the market and add some amount to prominence.


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