How to Invest in Mutual Funds in New Year? : Invest in SIP or a Lump sum.

 

Mutual Funds: Invest in SIP or a Lump sum.

 

As soon as the new year starts, 2-3 things related to investment start roaming in the mind. Where to invest money, how to save money for investment and how to save tax? Those who start new investments are worried about investment and when it comes to mutual funds, then it comes to mind people whether to invest a lump sum in mutual funds in the new year or take the help of SIP. 

So 2023 has started and 2022 has passed. The past year has not been good for investors and especially for those investing in the stock market. In such a situation, investors are now eyeing 2023. People expect that their invested capital will grow at a faster pace in the new year. Well, 

now the thing is whether lump sum money should be invested in mutual funds in the new year or through SIP, then the answer to this question is hidden in the economic situation around the world along with the movement of the Indian economy and market. Last year has been a year of rapid increase in the interest rates of central banks to deal with the Russia-Ukraine war, high inflation, supply chain problems, and inflation. 

The specter of recession is haunting many big countries. It has crashed the markets around the world. Although the Indian stock market still managed to give a positive return of 3%, the market remains in a volatile phase. Experts say that even though the economic situation is bad all over the world, it has not affected India much.

 

That is, even though there may be a decline in the Indian markets for some time, later it is sure to return to a boom. So if the market is in decline, then it would be better for you to invest in mutual funds at such a time. The reason for this is that you get units at low NAV. That is, at such a time you can invest lump sum money in the market. 

This will mean that when the market goes up, you will make a good profit. Suppose the market falls. Now in such times you can increase SIP and reduce it when the market is going up. In this case, you can get maximum returns. If you look at it from this point of view, investing through SIP is more beneficial than lump sum investment in mutual funds. 

Especially when the global market is in a sharp decline. Then SIP will always work. The biggest thing is that whenever there is uncertainty in the market, SIP proves to be most helpful for you. Here another method can also be adopted. Suppose you have a lump sum of money lying with you, then you can invest this money in a lump sum debt fund. 

After this, you can invest this money in equity mutual funds through Systematic Transfer Plan. STP is exactly like SIP. Here your money is automatically transferred from one mutual fund to another every month. This trick will give you two advantages. One, your money lying in the bank account gives less interest. In such a situation, if you put this money in a debt mutual fund, then you will get more returns on it. 

Also, from here gradually your money will start going to equity funds and the way will open for you to get relatively better returns. So this was the matter of investment in the new year, last year even though most people's investments could not give good returns, in the new year your money should be safe and get good returns. You must start planning for it. 

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