Pros:
1. Minimum Amount:A big benefit of SIPs is that it allows one to participate in the share market at very low amounts.
2. Investment discipline: Since the investment in SIPs is in the form of weekly, fortnightly, monthly or quarterly instalments, they tend to instill a certain level of investment discipline in the investor in terms of regular savings and investment.
3. Investments in SIP are safe becoz of Cost Averaging therefore you will get only positive returns in SIP.
4. It is high on convenience.
5. Stress free - An investor taking the SIP route doesn’t have to worry about timing the market.
6. Helps in Tax Saving
8. Mitigates risk: With SIPs, investment is done at regular intervals over a long period of time, therefore it tends to beat the market volatility.
9. Power of compounding
10. Assists in Retirement Planning.
11. Flexibility
Cons:
1. Unsuitable for irregular income flow.
2. Wrong funds:An SIP in the wrong fund doesn’t improve investment prospects.
3. Price Risk:Sometimes your investment in a SIP can go down and you can end up with a value lower than what you invested depending on how the market behaves.
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