SIPs and mutual funds can be designed to chase both short-term and long-term investment goals. It is, however, vital that credible information about the funds to invest in is available. Or you have to bank on goal-oriented investment platforms that provide research-based insight into the most suitable funds to match your financial goal. A point to note here is that ELSS (equity-linked savings scheme) is the only class of mutual funds that come under the purview of Section 80C of the Income Tax Act, 1961, where investments up to ₹1.5 lakh are exempted from taxation. It is essential to understand that mutual funds are not a get-rich-quick scheme, rather a tried-and-tested investment vehicle that has stood the test of time.
If you are starting out, then you must assess your risk tolerance and then choose the correct type of mutual fund scheme for yourself. For example, equity schemes are generally riskier than debt schemes but they give higher returns. On the other hand, SIPs instil a disciplined approach towards investing. With the autopay feature, as offered by some apps, you do not have to remember to invest. The amount is directly deducted from the account, making investments more seamless. SIPs also eliminate the need to time the market as they lead to rupee cost averaging.
Specific goals needed
The world of SIPs and mutual funds can be confusing, and one never knows when and how to start or stop. It is suggested that one must have specific goals when considering investing in order to pick your assets efficiently. That also encourages one to stick to their investment strategy. Such a goal-based investment approach will empower people to build specific goals and track them individually, by assigning each investment to a goal. This way, one can aim higher once they achieve one goal.
Speaking about retail investment, gold SIPs and digital gold have emerged as a preferred investment option, considering their vast scope of growth and durability. Fintech disruptors are taking further strides by combining the mettle of both mutual funds and digital gold investments, so that Indian retail investors, majorly bogged down by their many responsibilities, get the best return of whatever investment they make out of their hard-earned money. All that is awaited now is for you to set your financial goals and get started without any intermediary.
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