In Which SIP Should Beginners Invest? (2024)

Today, many people are investing in stocks. But even if you have a tonne of money to buy and sell, you may not know where to start. This article will help you find the best place for your first investment.

In the world of investing, mutual funds investment plans have been a popular option for individuals. They are unique because they are invested in many different stocks to maintain stability and ensure overall growth.

Despite their variety, there is generally one goal: to maximise your return on investment. However, this doesn’t happen overnight or without much effort or due diligence (no one invests in something they don’t understand). It can be difficult to know where to invest your money. You want the best return possible, but also want to ensure that your investments are secure for the long haul. So how can you make an informed decision?

Investing in SIPs:

One strategy that might work for you is investing in SIPs (Systematic Investment Plans). These plans enable investors to buy small amounts of stock and reinvest dividends. They’re simple and tax-efficient, and they’re a great way of diversifying your portfolio without having to worry about picking individual stocks yourself.

Systematic investment plans are a diverse investment option, and they can help you take advantage of dividend payouts and low-risk dividend stocks. You’ll be able to avoid most of the drawbacks of trading in and out of stocks, which can be risky for long-term gains.

Where to Begin:

So now that we’ve established some basics about what SIPs (Systematic Investment Plans) are, you may be wondering where to begin. Should new investors buy a group of stocks that pay strong dividends? Or should they sacrifice a little in the short term for higher up-front growth?

The answer depends on two factors: how much money you have to invest and how risky you want your investments to be. If you’re feeling a bit more daring and want to take on riskier stocks, then it’s best to invest in stocks with higher dividend yields. If you’re not a risk taker, you should probably stick with the group stocks. Regardless of your investment strategy, it’s best to consult a financial advisor before investing.

Our recommendation would be to start with a SIP. Try to make the investment plan as simple as possible, with a fixed amount to invest and a set amount each year to reinvest. You should also consider purchasing some bond funds instead of mutual fund shares. These funds have less exposure to stock market fluctuations and are ideal for long-term investments that hold steady returns over the long haul (like bonds).

Remember: Money invested in SIPs has a nice combination of risk and growth potential, making them a great place for new investors.

Here Are Some SIPs In Which Beginners Can Invest:

1. Quant Active Fund:

It is a multi-cap fund that has an allocation of 40 percent growth and 60 percent value stocks. It currently has Rs. 3,480 crore in assets under management (AUM). The most preferred sectors for this fund are pharmaceuticals, consumer staples, materials, etc. Since its launch on January 1, 2013, this fund has delivered average annual returns of 21.17%. It also has an expense ratio of 0.58%, which is much lower than what most multi-cap funds charge.

2. PGIM India Flexi Cap Fund:

The fund has been around since 2015 and is invested across the equity and debt markets in a diversified manner. It has been consistently profitable, with an annualised return of 14.91%, since inception. The current AUM is 5,291 crores, and the most preferred sectors for this fund are financial services, automobiles, technology, etc. It has an expense ratio of 0.31%.

3. Parag Parikh Flexi Cap Fund:

Currently, it has an asset under management (AUM) of 28,546 crore. The fund is a balanced fund that invests in the equity and debt markets with an allocation to defensive sectors like consumer staples, energy, etc. Since its launch on May 13, 2013, it has delivered average annual returns of 18.88%. The most preferred sectors for this fund are financial services, technology, etc. When compared to other balanced funds, it has a higher expense ratio of 0.76%.

4. Kotak Equity Opportunities Fund:

The fund has been around since 2013 and is invested across the equity and debt markets in a diversified manner. It has been consistently profitable, with an annualised return of 16.68%, since inception. The current AUM is 11,662 crores, and the most preferred sectors for this fund are energy, capital goods, chemical sectors, etc. It has an expense ratio of 0.59%, which is lower than most advanced equity funds.

5. Edelweiss Large & Mid Cap Fund:

It is a market-cap-weighted fund with 79.61% of its assets allocated to large caps and 20.39% allocated to mid-caps. The fund has delivered average annual returns of 15.92%, since inception. The most preferred sectors for this fund are automobiles, financial services, technology, etc. It currently has assets under management (AUM) of 1,696 crores and an expense ratio of 0.48%, which is much less than what other large and midcap funds charge.

There are many options available, and you may decide to invest in the one that works best for you. The above-mentioned mutual funds provide tax-saving returns to investors in the long run. They provide investors with stability and growth. The returns are higher than investing in bank fixed deposits. Also, they are suitable for all types of investors, and they are the best option when you are new to investment banking.

By now, we hope you are convinced about the benefits of SIPs and that you’ll try at least one. If you need help, you can consult an expert like Piramal Finance for more information on SIPs and how to invest properly. They can help you with your investments by providing valuable information on mutual funds, including the ones mentioned above. Good luck and happy investing!

In Which SIP Should Beginners Invest? (2024)

FAQs

Which is the best SIP for beginners? ›

Top 10 Best Mutual Funds SIP to Invest In India
  • ICICI Pru Bluechip Fund.
  • HDFC Flexi Cap Fund.
  • Nippon India Small Cap Fund.
  • HDFC Balanced Advantage Fund.
  • ICICI Prudential Equity & Debt Fund.
  • ICICI Prudential Corporate Bond Fund.
  • ICICI Prudential Short Term Fund.
  • LIC MF Gold ETF FoF.
Aug 8, 2024

Are SIPs good for beginners? ›

These funds have less exposure to stock market fluctuations and are ideal for long-term investments that hold steady returns over the long haul (like bonds). Remember: Money invested in SIPs has a nice combination of risk and growth potential, making them a great place for new investors.

How should I start investing in SIP? ›

How to Invest in SIP in India?
  1. Step 1 - Keep All The Necessary Documents Ready. ...
  2. Step 2 - Get Your KYC Done. ...
  3. Step 3 - Register For A SIP. ...
  4. Step 4 - Choose The Right Plan For Yourself. ...
  5. Step 5 - Choose The Amount Which You Want To Invest. ...
  6. Step 6 - Choose the Date of Your SIP. ...
  7. Step 7 - Submit Your Form.
Aug 7, 2024

Which is best stocks to start SIP? ›

List of Best Stocks for SIP Investment
NameLTPMarket Cap (Cr.)
T Tata Consultancy Services B S4,517.70₹ 16,22,803
H HDFC Bank B S1,666.60₹ 12,53,545
B Bharti Airtel B S1,646.75₹ 9,44,218
I ICICI Bank B S1,252.15₹ 8,71,038
7 more rows

Which SIP is best for $1000 per month? ›

  • Best SIP Plans for INR 1000 Investment Per Month.
  • ICICI Prudential BHARAT 22 FOF - Direct Plan.
  • Motilal Oswal Midcap Fund - Direct Plan.
  • Bank of India Small Cap Fund - Direct Plan.
  • Quant Small Cap Fund - Direct Plan.
  • Mirae Asset Great Consumer Fund - Direct Growth.
  • Mahindra Manulife Focused Fund - Regular Growth.

Which type of SIP gives highest return? ›

Best SIP Plans in India in 2024
Returns
Fund Name3 Years10 Years
Pure Stock Fund Bajaj Allianz19.31%15.67% View Plan
Diversified Equity Fund HDFC Standard15.67%15.12% View Plan
Growth Super Fund Max Life15.78%13.57% View Plan
7 more rows

What if I invest 1000 rs in SIP for 20 years? ›

Based on this data you will have approx 08–09 lakhs. Here your money will be safe or have zero risk. Mid Cap Mutual Fund:- If you invest Rs 1000/per month for 20 yrs in Mid cap mutual fund, Assuming that 15–16 % interest rate. You will have approx 15–16 lakhs.In long term all mutual funds are safe.

How much SIP should I start? ›

You must strive to save at least 30% of your gross income or ₹60,000 every month. To calculate how much amount you should invest in SIPs, we will have to use the standard formula, which is 100 minus your age to be invested in equity through mutual funds.

How do I choose a SIP wisely? ›

We suggest that you start a SIP only after knowing the 'Right SIP Amount' and Just stay invested during the goal investment period irrespective of the market going up or down. By doing so, you end up getting more units when the market is low and fewer units when the market is high.

What if I invest $5,000 in SIP for 5 years? ›

If you invest Rs. 5,000 per month through SIP for 5 years, assuming 12% return. The estimate total returns will be Rs. 1,12,432 and the estimate future value of your investment will be Rs. 4,12,431.

What if I invest $100 a month in SIP? ›

100 may not be appropriate for your needs. However, if, instead, your goal is to earn income from investments or make regular payments into one or multiple schemes, then this type of investment may be a good choice.

What if I invest $10,000 in SIP? ›

The 8-4-3 rule of compounding can be your way to achieve the Rs 1 crore corpus goal. Jiral Mehta, Senior Research Analyst, FundsIndia said that in this strategy, if you invest Rs 10,000 every month, assuming annual returns of 12 per cent, it takes 8 years to reach the Rs 16 lakh maturity amount.

Which bank SIP is best? ›

Best SIPs to Secure Your Family's Financial Future
  • 1) ICICI Prudential Bluechip Fund.
  • 2) Aditya Birla Sun Life Equity Fund.
  • 3) Aditya Birla Sun Life Tax Relief'96.
  • 4) Reliance Large Cap Fund.
  • 5) SBI Small Cap Fund.
Jun 18, 2024

Is SIP good for beginners? ›

Yes, SIPs are generally considered quite beneficial for beginners due to their systematic investment approach, which helps cultivate disciplined saving habits and mitigate market volatility through rupee cost averaging.

What is the best age to invest in SIP? ›

It's best to start your SIP as soon as possible, no matter your age. SIP investments grow over time, and the earlier you start, the more money you can build up. The best age to start SIP is now, as investments are better done as early as possible.

Which bank is best for starting SIP? ›

Best SIP plans for 2024

ICICI Prudential Smallcap Fund: This Fund focuses on small-cap equities and has shown consistent performance with a CAGR of 12.8% since its launch. It is an attractive option for investors with a moderately high-risk appetite due to its ability to pick high-growth small-cap stocks.

Which type of mutual fund is best for beginners? ›

Best equity mutual fund for beginners
NameSub-Category5Y CAGR (%)
Quant Small Cap FundSmall Cap Fund30.94
Quant Infrastructure FundSectoral Fund – Infrastructure28.01
SBI Tax Advantage Fund-IIIEquity Linked Savings Scheme (ELSS)27.18
Quant Tax PlanEquity Linked Savings Scheme (ELSS)26.82
6 more rows
Jul 30, 2024

How do I know which SIP is best for me? ›

These are the following things you need to keep in mind while selecting a particular SIP:
  • The mutual fund that you have chosen has been in market for at least from the last five.
  • The mutual fund you are planning to invest into should be operated by your bank. ...
  • The “fund house” chosen by you is reputable and recognizable.

How much money should I start SIP? ›

You must strive to save at least 30% of your gross income or ₹60,000 every month. To calculate how much amount you should invest in SIPs, we will have to use the standard formula, which is 100 minus your age to be invested in equity through mutual funds.

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