Written By: Ekvity Blog Jan 8, 2024
Capital Market Theory
Written By: Ekvity Blog Jan 8, 2024
It is very difficult to stand against the tide “ emotions play you up. However, to reduce your emotional involvement in decision making, you need to automate a few investments, particularly for goals which are a few years away. A SIP helps in managing .
Implies averaging out cost at which you buy units. Fixed investments at periodic intervals through SIPs ensure that one ends up purchasing units at different NAVs over a period of time.
Continuing SIPs over the long period not only helps you ride the market volatility but also helps you ignore market noise and overcome greed and fear.
Sustained disciplined investment through SIPs ensures that more and more units are being accumulated at lower NAVs during market downturns and gradually over time market value outpaces average cost of investment.
With long tenure SIPs, as the number of years increase, the money compounds at a much higher rate