The systematic investment plan, also commonly known as SIP allows investors to invest a fixed amount on a regular basis, in a selected mutual fund scheme. In most cases, it is in an equity mutual fund scheme. Over the last few years, SIP’s have become popular with the rising equity market, especially with the returns they have generated in the past.
Like any other investment option, you need to know the in’s and outs of SIP investment and trading. There are various options you can consider, right from seeking solutions online or any other investment source.
But the SIP Investment plan learning lessons can be found right in your own home. In fact, you can expect lessons from one of the least sources, especially the ones that thrive in the smallest gap in the walls or even the nook or corner of your home. They live in colonies and scavenge for even the smallest morsel of food in the least likeliest place. The home variety comes in either in black or red.
Sounds familiar? Yes. We are talking about ants.
You would be surprised how these small six legged insect can teach us a thing or two about investing. They may seem like a tiny spec to your eye, but they can surely pack a punch, especially when it comes to their industrious life style and complex social structure. Moreover, ants by nature are known to be extremely disciplined, organised, enterprising and hardworking, qualities that are required in the investment of a SIP plan.
Still not convinced? Why you only need to look back at your childhood to know more. Surely, you’ve heard about the story of the hardworking ant and the singing grasshopper. A short version of the story tells us how the grasshopper whiles away the summer, mocking the ant’s effort to store up on food until the cold winter comes upon them, leaving the ant well in comfort, with the grasshopper seeking food and shelter.
The story is no different to the behaviour of ants and how they are in real life. But how do they inspire SIP investment planning and investment? Here is how.
Grabbing opportunities whenever they can: Have you ever notices how even the smallest amount of grains can attract ants when you least expect it? Within no time, you will see them lift the grains and take it back immediately to their colony home. No, they do not wait for the right time, neither do they wait for the opportunity to turn to their favour. So what’s stopping you from investing in the moment, as opposed to investing in the ‘tomorrow’ that will never seem to come? You may have done your research about the best mutual fund that offers high returns, or even schemes that match your end goals. You may be waiting for that bonus or that hike in pay. But in the end, you may be as close to investing as to winning the lottery. Be like the ant, where even the smallest of the grains should be an incentive for you to invest in your mutual fund SIP investment. Don’t wait for your collage days to end, or even your increment to occur. Start investing in your mutual funds now.
Invest in safety: Seeking to invest your funds doesn’t end just at investing. You also need to consider the means to protect your investments. Take for example the ant’s storage facility in colony. They ensure they store it in place that is well protected from risks. Even when scavenging for food, ants believe in safety in numbers, and will attack any other insect that will steal its food. You also need to take measures when investing your finances in a SIP investment plan. The mutual fund market is susceptible to market trends, both high and low. The schemes within the market can offer a wide range of investments returns. At the same time, it comes with a lot of risks. You can easily invest a quarter of your capital and get double in return in a single scheme. Or you can even invest your whole capital and fail to get anything back in return. Investing in one single scheme is equivalent to an ant storing food exposed to outside elements and other insects. You need the safety of different sip investment schemes that will offer you good securities in return. Ensure that you are aware of what the scheme is offering you in terms of security before investing, even if they do offer high returns. After all, high returns do not guarantee returns all the time.
Preparation against unexpected elements: As previously mentioned, the mutual funds market is susceptible to market risks, as much as favourable returns. When you least expect it, the market can come crashing down, taking all your investments with it. Even inflation can steal your investment funds. Now just imagine the storage facility of the ant colony coming in contact with an unexpected flood. Immediately you will notice all the ants shifting their food storage to a higher place, which is a safer one. The same can be done with your investments. You need to ensure that the mutual fund sip investment scheme that you are investing in, offers a higher return than the inflation. When stock values drop or the investment return value falls, you can be well assured that the schemes you have already invested in, will offer you the returns above the value of the inflation rate. A good research through all the available mutual fund stocks will help you understand which will give you a good return under such circumstances.
Take your investments slow and steady: Your investment SIP plan does not required to be an overnight investment nor does it has to happen over a few weeks. You need to invest small amount over a considerable time. If you take closer look at the behaviour of ants, you can notice that year round, especially during the warm months, they will seek food whenever and wherever they can. SIP’s work in the same way. Over time, your SIP investment plan will give you a high savings, which can occur over a period of anywhere between a year to 7 years. You only need to take your time, once you have figured out the market and its trend and how to meet your financial goals with the right investment plan.