I personally am a fan of Systematic Investment Plan (SIP) in Mutual Funds for creating long term wealth. It has been marketed so well by mutual fund companies that everyone seems to see all positives but no cons. But as true for anything you do or plan, it’s essential to know about disadvantages of SIP. So here is a post to make you aware of the cons of Systematic Investment Plan and suggest if there is a way out?
What is SIP?
SIP is short form for Systematic Investment Plan. Also known as Rupee cost Averaging (in India) or Dollar cost Averaging (in US). It essentially means you can automatically invest your money systematically in mutual funds on a fixed time interval (daily, monthly or quarterly). When you start a SIP, you have to give an auto-debit mandate to your bank which transfers the money on the pre-defined interval to the mutual fund. The good thing about SIP is it automates the investment taking emotions out of the entire process. However we list down some of the…