SIPs are supposed to be a simple and straightforward idea. You invest a fixed sum regularly in an equity fund, regardless of market conditions. Over a long-term, you end up buying more units when the markets are down and fewer when the markets are up. Your average price of acquisition is inevitably lower than what it would have been had you tried to time the market by trying to predict and anticipate its movements. Instead of trying to time one's investments, one should regularly invest a constant amount.
Yet, in the past 314 days, since the beginning of this year, we have received 4,179 mails, or about 13 mails each day seeking recommendations for the best SIPs to invest in.
The cover story this issue does not list five funds to invest in, instead it goes into what should SIP investors not do and what they should not expect from SIPs. What investors need to know about SIPs is that you keep buying at all level - high and low - regardless of what your instincts urge you to do. You automatically buy more when the market is low and less when the market is high.
To read in detail about SIPs.. Subscribe the November-December 2012 issue of Mutual Fund Insight now.