5 ways to supercharge your SIP investments in 2024

SIP mutual fund investments are popular for several reasons – they are convenient modes of investment, ideal for goal-based investing, and they offer moderate-to-high returns.

According to data revealed by the Association of Mutual Funds in India (AMFI), the total amount collected through SIPs in India in May 2024 was ₹ 20,904 crore. While mutual funds can certainly set you on the right investment path, they might not always provide the returns that you expect.  

5 ways to supercharge your SIP investments in 2024:

Here are five tips that you can follow to consistently grow your returns over time via SIP investments:

  • Be clear about your investment goals: You must know your investment goals to pick the right mutual fund and decide on the ideal investment amount for your SIP investments. Knowing your goals will also help you decide the ideal investment horizon for your investment.
  • Note down your preferences and compare mutual funds: You must assess your risk appetite and evaluate your liquidity-related concerns. If you prefer higher liquidity, you could consider investing in a liquid fund. If you wish to take higher risk, you can invest in a small-cap or mid-cap mutual fund scheme via a systematic investment plan. You should also consider how your mutual fund returns will be taxed. If you wish to save more in taxes, you can opt for an ELSS (equity-linked savings scheme) fund. You must create a list of funds that meet all your preferences and compare their features to shortlist 1-2 funds that suit you best.  
  • Use a mutual funds calculator to estimate your returns: Mutual fund calculators are free online tools that help investors estimate their mutual fund returns before investing in them. You must use this tool before investing in a fund to better plan your investments. You can also use this tool to effectively compare two or more mutual fund schemes based on their estimated returns.
  • Diversify your investment portfolio: You must look to considerably diversify your investment portfolio. Risk management through diversification is extremely important to earn higher returns as it helps you spread the overall risk across your portfolio. For instance, you can invest in a debt fund category to reduce the risk posed by your equity fund investments.
  • Reassess from time to time and realign your portfolio: You must regularly reassess your SIP investments to check if they align with your investment goals. Remember that investment goals are subject to change over time. While reassessing your investment periodically, you might have to opt for the “step-up SIP” option to gradually increase your monthly SIP contributions. Doing so will help you gradually grow your returns.

You can supercharge your SIP investments in 2024 by fixing clear financial goals, comparing mutual funds based on your preferences, diversifying your investment portfolio, and reassessing your portfolio regularly. Another very effective way to supercharge your SIP investments is using an online mutual funds SIP calculator to calculate your returns in advance.

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