Stock SIP - A Systematic Way to Invest in Stocks

Key highlights

• Stock SIP allows systematic investment in stocks.
• Stock SIP gives you the benefit of rupee cost averaging and lets you take advantage of the power of compounding.
• SipIt by Kotak Neo allows you to systematically invest in equity shares and exchange-traded funds.

You must have heard about systematic investment plans or SIPs, right? SIPs are amongst the most preferred ways to invest in mutual funds and build a corpus for various life goals. However, can you start SIPs in mutual funds and stocks? Yes! Stock SIP is the new flavour of the stock market through which you can systematically invest in your chosen stocks. Read on to learn what stock SIP is and its benefits.

What is Stock SIP?

Like its mutual fund counterpart, a stock SIP entails investing a fixed amount at regular intervals, typically monthly. The difference? Instead of mutual funds, you put your money into stocks. Over time, you accumulate many stocks without breaking a sweat.

Benefits of Stock SIP

Now that you know the meaning of stock SIP, let’s examine its benefits. A stock SIP brings these benefits to the table:-

• Disciplined Investing Without Lumpsum Investment

It’s a common belief that investing in stock markets requires enormous capital upfront. However, it’s not true. Stock SIPs allow you to invest a small sum in your chosen stock at predefined intervals. You need not worry about having a sizeable investible surplus to get started. Regular investments through stock SIPs help in building a consistent and disciplined investment habit, which is essential for wealth creation in the long run.

• The Advantage of Rupee Cost Averaging

Like in mutual funds, a stock SIP allows you to benefit from rupee cost averaging. Regularly investing a fixed amount leads you to buy more shares when prices are down and less when prices are high, potentially lowering the average acquisition cost.

• Bringing Compounding into Play

Stock SIPs allow you to benefit from the power of compounding, a phenomenon that can significantly enhance the growth of wealth over time. Many stocks pay dividends, which are a distribution of profits to shareholders.

With a stock SIP, these dividends can be reinvested to purchase additional shares. This reinvestment amplifies the compounding effect as you earn returns not just on the initial investment but also on the accumulated returns.

• Enter Market With Lower Risk

This is another significant benefit of stock SIP. As stock SIP entails investing a small amount and not a lump sum investment, it allows a strategic entry into stock markets at a lower risk, regardless of the market condition. Additionally, it ensures your participation in markets over different market cycles. This could enhance overall risk-adjusted returns in the long run.

Maximise Benefits from Stock SIPs With SipIt

With these host of benefits, it will not be an understatement to say that a ‘Stock SIP Sahi Nahi…Kaafi Sahi Hai’. SipIt by Kotak Neo allows you to start an SIP in Equity Shares and Exchange-Traded Funds (ETFs).

That’s not all. SipIt allows you to explore curated lists like:

• Most SIP’d – A list of Stocks/ETFs in which most numbers on SIPs have been started
• Buzzing Stocks – A list of Stocks/ETFs in which most numbers on SIPs have been created in the last 7 days
• Top Gainers - A list of Stocks/ETFs with the highest CAGR in the last 5 years
• Powered by Kotak research section- A list of Buy Calls given by Kotak Research team
• Sectors that drive the marke’- A list of top-performing stocks bifurcated based on their sectors.

So, what are you waiting for? Make the most of Stock SIPs with SipIt today.