What is Stock SIP and its benefits?

Every stock investor aspires to become wealthy over time.

However, only a handful of the long-term investors are able to see it through to the end.

There are several reasons for investors to give up in the middle of the process. The common reasons are because it is time-consuming and exhausting.

This results in failure to achieve their financial goals that they had set out for

In order to reach your financial goals with long-term stock investments, you must always adhere to these 3 virtues:

  • Commitment, 
  • Discipline, 
  • Willingness

Once you start following these 3 values in your life, you will see how simple and achievable your money development path becomes. 

The Path of SIP:

After you’ve set your eyes on the goal, the next step is to start systematic and regular equity investments in quality stocks and hold them for the long term. This approach ensures that you capture the market at its highs and even its lows.

Up until now, equity investments in a staggered manner could only be done automatically with mutual funds or manually with individual stock purchases; again, a tedious process.

To eliminate the hassles of regular equity investments, we have created Stock SIP, one of the advanced features on the Samco app that will aid you to make automated regular investments in your selected stocks at a specific interval.

Understanding Stock SIP:

Let’s first understand what Stock SIP is and how it works.

Stock SIP is a simple way to invest in equities. It allows investors to acquire stocks in a systematic (quantity-based) way on a regular basis (monthly). It is the best investment strategy for long-term investors as it enables you to take advantage of the market’s unpredictability by implementing a disciplined investing plan.

Benefits of doing Stock SIP:

These are 4 benefits of doing Stock SIP that will help you to create wealth in the long run:

1)  Disciplined Investing

The benefit of doing Stock SIP is that it helps you invest in a disciplined manner. By doing Stock SIP, the habit of investing frequently will not seem burdensome. 

Also, instead of leaving all your money in the bank and earning hardly 3.5% interest rate, you could invest a small amount in stocks each month and potentially earn higher returns in the long run.

2) No Need To Time The Market

The second advantage is that you need not worry about timing the market.

Timing markets is extremely essential because if you are invested at the top of a cycle you tend to lose your capital when the prices correct. But with Stock SIP, the timing problem is entirely solved because at the top when the price is higher, you’re simply buying fewer units, which averages out when you’re again investing at the bottom and buying more units. Therefore, no headache to time the markets.

Imagine if you invest a lump sum and the market crashes later by 30%, you’ll end up suffering huge losses. Let’s say if you had invested before Mar 2020’s fall and later markets crashed, you would’ve made deep losses and your wealth would have eroded. But if you had made a SIP in it then it would affect only a part of your investment and hence your losses would have been lesser.

3) It’s Like Your Own Mutual Funds

Another advantage of Stock SIP is that you’ll have your own small mutual fund that you’ll be running. You can have a diversified portfolio of stocks which will be easier to maintain and will help you build wealth in the long run.

4) Doesn’t Require Huge Capital To Start With

Stock SIP doesn’t demand higher investment at one go.

With Stock SIPs, you can spread and plan your investment requirement in this manner because you don’t need to buy everything in one go and you can invest as you earn. You can also increase your investment as and when your salary grows with inflation.

Selecting the Right Stocks for SIP:

Selecting the right stock is equally important as making regular investments to grow your wealth. 

In order to select quality stocks for long-term investment, you can refer to the ratings on each stock on the Samco app. These ratings are derived from Samco’s Stock Ratings matrix, which identifies the stocks based on several different fundamental and technical parameters.

Then, all you need to do is start investing in those highly-rated stocks every month which can be done easily using the Stock SIP feature on the Samco App.

Start your Stock SIP on Samco

Follow the steps given in this video to start your Stock SIP on the Samco app.

We hope this article covered everything on Stock SIP. In case of queries, you can get in touch with us on 022-2222-7777 or raise a support ticket here → 

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