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.
Recommended to Use Scripbox’s: SIP Calculator
Long Term Portfolio
The right mutual funds for your long-term goals with inflation-beating growth plus risk management.
Indicative returns of 10-12% annually
Investment horizon of 5+ Years
Long term goals such as retirement or building your wealth
- What is the meaning of SIP in mutual funds?
- Types of SIP Plans
- Mutual Fund Redemption Charges
- Micro SIP in mutual Funds
- Weekly or Monthly SIP: Which is better?
- How to Deal with Loss Making SIPs
- How to start SIP investment
- How can I stop SIP in a mutual fund?
- What is the meaning of perpetual in mutual funds?
- Why should I invest in SIP?
- How to increase the SIP amount
- How can I open a SIP account online?
- Why SIP is a Powerful Tool Against Market Volatility?
- Common Myths About SIPs