A systematic investment plan is a method of investing a fixed amount into a mutual fund at regular intervals. It is a contribution method, not a separate investment product.
What SIPs can and cannot do
Regular investing can reduce the pressure to predict short-term market moves and can buy more units when prices are lower. It does not guarantee returns, prevent loss or make an unsuitable fund suitable.
Choose the fund before the frequency
Match the fund category with the goal and horizon. Review the scheme’s mandate, benchmark, portfolio, expense ratio, tracking difference where relevant and risk information. Direct and regular plans have different cost structures.
Review sensibly
A short period of underperformance is not always a reason to stop. Review whether the fund still follows its mandate, remains reasonably priced and fits the goal. Update the contribution when income and goals change.