Systematic Investment Plans (SIPs) have revolutionised the investment landscape in India, gaining immense popularity as a preferred saving and wealth accumulation tool. An increasing number of Indians are shifting away from traditional saving instruments and embracing SIPs, drawn by their potential for better returns. Recently, Radhika Gupta, MD and CEO of Edelweiss Mutual Fund, who is a vocal advocate for investing in SIPs, again encouraged her followers to invest regularly in mutual funds. According to Ms Gupta, the true benchmark of financial accomplishment should not be the number of real estate holdings, but rather the monthly amount invested in SIPs.
In her tweet, she noted that in Delhi NCR, the number of properties one owned used to be the ultimate status symbol. People would brag about owning multiple plots, flats, and office spaces. However, Gupta suggests that it’s time to shift this mindset. With India’s growing economy, she believes the new measure of wealth should be the size of one’s monthly Systematic Investment Plan (SIP) book.
”Once upon a time in Delhi NCR where I come from, the measure of wealth was the number of properties you had. Showing off meant talking about one plot here, one flat there and another office space close by. With India financializing, the new measure should be the size of your monthly SIP book. I would love to hear young people say, “Meri toh mahine ki 1L ki SIP hai (I invest ₹1 lakh monthly in SIP), what about you?” she wrote on X.
See the tweet here:
Once upon a time in Delhi NCR where I come from, the measure of wealth was the number of properties you had. Showing off meant talking about one plot here, one flat there and another office space close by.
With India financializing, the new measure should be the size of your…
— Radhika Gupta (@iRadhikaGupta) September 17, 2024
Earlier this year, Ms Gupta took her advocacy to the sets of Shark Tank India, where she urged staff members to start investing through Systematic Investment Plans (SIPs) in a backstage video. In July, she introduced the concept of “dal-chawal” funds, emphasizing their importance in building a robust investment portfolio. She explained why investors should not “narrow” their investments in select sectors in the prevailing situation and instead focus on broad-based funds.
About SIP (Systematic Investment Plan)
SIPs offer a disciplined investment approach, allowing individuals to invest fixed amounts at regular intervals, regardless of market fluctuations. For running a SIP, you need to invest a fixed amount at predetermined intervals. The amount could be as low as ₹ 500 and you can pick the intervals depending on your flexibility as weekly, monthly, quarterly, half-yearly, and annually.
Maintaining them for 15-20 years will give you great returns in future. The earlier you invest, the better. SIPs stand to benefit in the long term as the investment growth is compounded and any periodic loss is averaged out.
Unlike traditional savings tools like FDs, PPFs, and NSCs, SIPs provide exposure to a diversified portfolio of stocks, bonds, or other securities, potentially generating higher returns over the long term. SIPs also cater to various investment goals and risk appetites, offering a range of schemes, from conservative debt funds to aggressive equity funds.
The benefits of SIPs extend beyond returns, offering convenience through automatic transfers, professional management by experienced fund managers, transparency through regular statements and updates, and liquidity, allowing investors to withdraw or redeem units as needed.