A relative recently told me about weekly systematic investment plans (SIPs). I have been investing for the past 2 years with monthly SIPs. Are there any benefits of moving to weekly SIPs?
—Raman Vishwanathan
One of the main advantages of opting for an SIP is, to be able to reduce the risk of timing the market. By investing a small amount periodically, compared to investing a lump sum at one time, the risk of investing at a wrong time in the market is substantially reduced. When it comes to periodicity, most people choose monthly instalments as it matches the frequency of their income cash flow (salary). Also, it is easier to manage from the standpoint of managing the balance in your bank account, as you would need to worry about the account balance on just one day in a month. If you choose to go with a higher frequency, you would need to be manage your cash flow and account balances carefully to ensure that the SIP investments take place without failure.
