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Top 10 Golden Rules of SIP Investment - ABSLMF Blog

10 Golden rules to make the best use of SIPs

Feb 20, 2020
4 mins | Views 12487
  1. Commence your Investment journey Early

    The returns on your investments are directly proportional to the number of years of investment, so the sooner you start; the more time your investments will have to grow. Aim to start Systematic Investment Plan (SIP) early, even if it means starting with a small amount.

  2. Use it for Long-term Investment goals

    SIP investments in equity funds are suited for long-term wealth creation and should be with minimum investment horizon of five years or more. SIP can also aim to help you to average out the cost of investment in volatile market conditions.

  3. Use it for Short term Investment Goals

    SIP investments can be started in suitable debt funds as well with an aim to fulfil your short-term goals.

  4. Invest in Growth option

    You can go for growth option while doing an SIP if you are investing for long-term goals as your money gets reinvested and the power of compounding helps your investments grow.

  5. Have Goal-specific SIPs

    Aligning your SIP investments to a defined future goal will help you to make your investments more meaningful. It will also help you define where you want to reach and help monitor your progress.

  6. Be Consistent

    SIP investments are all about creating and maintaining a disciplined approach to investments. Thus, being consistent with your SIPs without stopping or missing out on your SIPs is essential to achieve desired results.

  7. Monitor but do not Over-monitor

    Regularly reviewing your investment portfolio is important, but if you are constantly monitoring the purchase price every month and churning your portfolio, then it may adversely impact your portfolio.

  8. Increase your SIP investment with increase in Disposable Income

    Even if you start small increasing your SIP amount as your income increases will help you reach your goals faster.

  9. Don’t get swayed by Market Movements

    The basic idea of SIP is to average out the cost of purchase of your investments. Trying to time the market and increasing/decreasing your investments, defeats the very purpose of SIPs.

  10. Plan your Redemption

    You need to start the redemption process once you inch closer to your goal. To sail smoothly through the market volatility while redemption, it’s imperative that you plan a gradual exit from your equity funds. For this, you can consider staggering your redemption over a period or opt for systematic withdrawal plan.


Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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