There’s no such thing as SIP timing. But investing in a long-term and disciplined manner is recommended, but the best time is probably the start of the month when you receive your salary. It is so that you do not have to skip SIP installments to seek funds.
The Systematic Investment Plan (SIP) is considered as a booster of the overall investment portfolio and is mainly supposed to average the value of the rupee in the portfolio. Therefore there is no best or suitable time to start.
Here are a few things that you should bear in mind when investing in mutual funds through the SIP route:
Long-Term Selection: Choose Long-Term to reap the average benefits of SIP when you have the opportunity to get reasonable returns. The historical performance over various periods suggests that if you hold on longer, say for five years, the markets will be less likely to fail. Apart from this, you can also reduce your monthly SIP installments by increasing SIP tenure.
One or two significant declines with long-term gains insight or a marginal impact on the entire investment are whether you start the SIP at the beginning of the month or give the user almost the same benefit over the long term at the end of the month.
Keep one goal in mind: It is essential to relate your best SIP investment to the financial goals that you plan to achieve in the next few years. Once you know what the goal is for you to start SIP. We all know that this will not be enough to achieve all our goals with our current and potential future income. Thus, the desired results can be generated from the accumulation of investment over the long term via the SIP route driven by compounding.
Be consistent and disciplined: A SIP provides regularity and continuity of investment. To increase your money, you need to be disciplined with your investment. SIP is a time-tested discipline that makes automated investing easier. Missing SIP installments to accumulate a large-sized fund in the long term will act as a nail in your plan.
Controlling impulses: Investors are skeptical about market conditions when the market declines and investors close their SIPs, the expectation decreases. The risks of high market volatility are driving them to stop investing. But in the context of SIP, this is the wrong approach. Continue your SIP. When the market falls, you can buy more mutual fund units for the same price. In the long run, it can help bring down the total cost of your investment. Besides, best SIP investments are distributed over several months. It also helps mitigate the adverse effects of market downturns.
Note: The main advantage of SIP is to have some leverage on market fluctuations through the average cost of the rupee. So when the markets are high, the number of NAV units will be low, and when the markets are weak, the purchased NAV units will be top.