Systematic Investment Plan or SIP is a mode of investing money in the top mutual funds in a smart and convenient manner. Investors call it a revolution in the field of investment plans. It is one of the most baffling investment plans. Generally, the new investors are quite cautious of using SIPs because of the confusing nature of these investment plans. Many times it is seen that even the experienced players in this field who have the right knowledge of the SIP calculator, struggle hard in getting their strategy right. Such is the nature of the SIPs.
All of us invest a part of our hard-earned money in some or the other saving instruments like the FD, RD, NSC, etc. The most popular among them is the Systematic Investment Plan or SIP.
If you have surplus money and are thinking of investing it in top mutual funds then wait for a while we have something to tell you. The top mutual funds are not without the limits.
Let us explore it further.
Some funds have a high minimum investment limit. This limit for the minimum invested amount varies greatly across the different categories of the top mutual funds.
As an example let us consider the adult movies. As we all know that people below the age of 18 years are prohibited from watching the adult movies, similarly the top mutual funds also set a certain minimum investment limit keeping in mind the target audience and the main objective of investment. Initially, the minimum investment limit is kept high if the targeted customers are High Net Worth individuals and low for the low-income group people.
Also, most of the short-term top mutual funds keep their minimum investment limit high. It is done with the objective of meeting the expenses of managing the top mutual funds.
Many of the top mutual funds which invest in cash set different limits for growth and dividend plans. The returns in the dividend plans are low as compared to others. Therefore, the initial minimum investment limit is generally high. On the other hand, the equity funds generate higher returns thus the top mutual funds keep their initial limits low. In fact, you will see that many of the top mutual funds keep very low limits for the SIPs in the tax saving category.
We find that the top mutual funds that do not have any maximum limit for investment. But they do keep a minimum limit.
When you decide to invest your money in the top mutual funds you need to keep the following points in mind:
Even if you have decided to invest in one of the top mutual funds, you should try to economize on the costs. Pay attention to the fact that you do not pay any upfront sales on the purchase of the best mutual funds to invest. If you are doing that then a big part of your invested money is going into the broker’s wallet.
Just being aware of a number of your funds isn’t sufficient. You should try to invest in diversified portfolios. All the top mutual funds offer a plethora of portfolios.
Even after selecting the top mutual funds and making your investment you should keep an eye on your investment. If you think that after making the investment your job is over, you are wrong because the real work starts now. Monitor your funds on a regular basis to see if they are running smoothly. If there is a change in the management of your investment, you should keep an eye on how the new fund manager does his/her job and how the previous one was doing it in the top mutual funds.