January 31 , 2013
It is a method by which you put in a fixed sum of money periodically into a fund. The amount of money, the frequency and even the dates to invest are decided in advance. Sometimes markets are low, and you get more value for your money; sometimes it is the other way around. But as long as markets over a 5-10 year frame move up, your investments grow in value.
As a kid, say you were allowed half an hour of television a day. Sometimes there was a cricket match on, and this only allowed you to see seven overs. But sometimes there was a Tom & Jerry cartoon show on, where you could watch three full clips easily. In either case, the half hour discipline made sure you had a change, but not too much of a distraction. Very broadly, an SIP is a similar investment discipline. A good mutual fund systematic investment plan will help you achieve your long term financial goals.