Start up your SIP as early as possible

SIP stands for Systematic Investment Plan. As the name suggests, it is one of the basic step for investing systematically & creating wealth for your retirement needs

Even if the markets are up or down, they are moving slow or even if there is a bubble like 2008, SIP helps you to invest systematically and helps you to make a average price of your investments. As a investor, one can even start up a SIP in Mutual funds with amount as low as Rs 100 per month & can create wealth in a long run. A investor should analyze the Mutual funds on the basis of following factors

· CAGR Returns of past 3 years & 5 years

· Age of the fund

· Experience of the fund manager

· Beta, R squared

Helps in Rupee Cost Averaging

Rupee Cost Averaging means you start a systematic investment plan (SIP) with a mutual fund house and you assign a fixed amount towards purchasing the units every month & it helps you to avoid the timing of the markets. Because a lot of people who have done lump sum investments in 2008 are still waiting to get their money recovered. But if you have invested systematically in 2008, you could have gained 50% from 2008 highs.

TOP Mutual Funds

The top mutual funds for 2011 are

1. Relaince Equity Opportunities Fund

2. HDFC Top 200 Fund

3. Reliance Pharma Fund

Among the balanced funds, HDFC Balanced fund can be a good bet for a investor who is looking for 15% annualised returns. So start up a SIP in Mutual funds as early as possible so that you don’t out on creating wealth. A financial planner may help you in monitoring your investing year after year as he may help you in getting better returns

This article is given by Mr. Mayank Gupta, MBA Finance, who is a founder at wealth management company www.wealthbazaar.in