Systematic Investment Plans (SIPs) are the most rewarding way to build wealth. They average the cost of your investments, and deliver superior returns with fewer shocks over the long term.
Designing a rewarding SIP portfolio is simple. All you have to decide is:
- Asset allocation - It means how much money would you invest into a particular category of mutual funds every month. A typical asset allocation would be 50% in large-cap funds, 20-30% in small / mid-cap funds, and the rest in debt funds.
- Number of schemes - Your portfolio should have at least three schemes in it. On the upper side, it should not have more than seven-eight schemes. More than that, and your portfolio becomes difficult to track and manage. An ideal portfolio would have five schemes - four equity schemes and one debt scheme.
- Mutual fund schemes - This is the last step to designing a rewarding portfolio for the SIP route of investing. Look at curated lists of top-performing mutual funds like FundsIndia's Select Funds. Just pick one or two funds from each asset class, and that's it! Your rewarding SIP portfolio to build wealth like never before will be ready!