Systematic Investment Plans in Stocks

Updated on 14 Dec, 2023

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What is SIP in Stocks?

SIP in Stocks means investing your money in shares through small regular investments. Though it works on the same principle as mutual fund SIP, you are investing in individual shares of companies. It also helps if you invest in stocks of more than one company through a SIP investment.

For example, if you intend to buy 10 shares each month. You can invest in a SIP of Rs. 10,000 or any other suitable amount. The funds will be used to purchase the stocks of the company at regular intervals of time.

Who Should Opt For SIP in Stocks?

SIP is useful for investing in stocks in a disciplined way. You can invest in stocks through small regular investments. It is a long-term investment option using which you can invest regularly in a basket of stocks.

Difference between SIP in Mutual Funds vs SIP in Stocks

Following are the differences between SIP in Mutual Funds and SIP in Stocks:

SIP in Mutual Funds	SIP in Stocks
It is useful for investing in mutual funds.	It is useful for investing in stocks.
Suitable for retail investors or first-time investors in the equity market.	Suitable for seasoned equity investors and helps them actively manage their investments.
The investment gives you the benefit of diversification.	Offers limited diversification to your portfolio.
It involves less risk.	It involves higher risk.
Your investment is managed by experienced fund managers.	You must make the right investment decisions and decide the entry and exit point of each stock.
Rupee cost averaging benefit is realised.	The benefit of rupee cost averaging is realised only if you invest at the right time.