Question 1

What is SIP?

Accepted Answer

SIP (Systematic Investment Plan) is a method of investing a fixed amount regularly in mutual funds. It helps in rupee cost averaging and building wealth over time through the power of compounding.

Question 2

What returns can I expect from SIP?

Accepted Answer

Historical returns vary: Large cap funds average 10-12%, Mid cap 12-15%, Small cap 15-18% over long periods. However, past performance doesn't guarantee future returns. Use 10-12% for conservative estimates.

Question 3

Is SIP better than lump sum investing?

Accepted Answer

SIP reduces risk through rupee cost averaging - you buy more units when prices are low and fewer when high. Lump sum can give better returns in a rising market, but SIP is better for regular income earners.

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