The continued decline in the stock market has shaken investors. Experts say that this decline is examining the patience of investors. In this, the same investors will be able to earn big money, which will remain in the market even amid the decline. Experts say that investors do not have to stop their sips, especially. If you are going to invest from SIP in mutual funds, then you do not have to stop it even after forgetting it. In the midst of the decline, your investment from SIP will bring big profits for you when returning recovery in the market. The question is that to invest in mutual funds right now, to invest in SIP and STP?
What does SIP mean?
Systematic Investment Plan ,Sip) We know about. This allows you to invest the amount fixed in the mutual fund scheme every month, every week or every quarter. This route is quite convenient for jobbing people who get salary every month. It gives an opportunity to maintain discipline in investment.
What does STP mean?
Systematic Transfer Plan (STP) is used by less investors. This gives you the opportunity to transfer the amount already fixed on a pre -fixed period in another scheme from one mutual fund scheme. STP is beneficial for investors who want to transfer their lump sum investment from date funds to equity funds. This reduces the risk related to investment.
SIP is right for jobs
If you do a government or private job and at the end of every month your savings account comes, then the path of SIP is right for you. If you are a self-employed or your business, then STP’s path is right for you. The reason for this is that the income of self -employed and business people is not stable. If they have more income for some month, then they have less income. In case of more income, such people can invest outright in date funds. Then you can transfer money to the equity scheme of mutual funds through STP from that fund.
Also read: Stock Market Crash: If you are in big loss then know what you should do now
Who benefits in use in the era of decline?
Investment from STP is very beneficial during the market fall. The reason for this is that no one knows when the market decline will end. In such a situation, every month your money will go into equity funds through STP. This will reduce your average purchase cost. The direct principle of investment is that the lower the price you invest, the more your profit will be.