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Scheduling SIPs

Don’t stretch your investing schedule into the discomfort zone

I plan to start investing in mutual funds through the systematic investment plan (SIP) route, but I am not able to decide what should be the optimum frequency of installments. Should I invest monthly, quarterly or half-yearly?
-Aman Chhabra

More than anything else, the optimum frequency of an SIP should be a function of your convenience. You should first ascertain how frequently you can set aside funds for investment without pushing your finances to the edge. While there is no doubt that an SIP is the best way to invest in equity funds, there is no sound basis for saying that a particular frequency of investment is the most profitable. If you can invest comfortably every month, why not go for the monthly option? In this case, the concept of rupee cost averaging may also work better for you.

Moreover, whether you invest monthly or quarterly will not affect the performance of your portfolio as much as your discipline over the long term. Therefore, invest through SIPs, but choose the frequency that is more convenient to you.

Also See:

SIP Return Calculator

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