Investors through their demat account can invest in different types of stock market securities like shares and mutual funds. Moreover, through systematic investment plans, they can generate an immense amount of wealth through the power of compounding and consistent investment. One can even take the assistance of a dedicated SIP calculator which can help identify the future value of their investments, select the right fund for investment, and arrive at the right SIP amount. The following points can help explain the best ways to strategically use a SIP calculator to manage an investment portfolio with complete efficiency and effectiveness:
- Selection of the right fund:
A SIP calculator can help investors select the right fund for investment. Helping investors ascertain the future value of their regular investments into different funds like ETFs, mutual funds, and even stocks, Investors can select the best fund that matches their preference, risk-taking capacity, and overall returns. For example, a mutual can offer a return of ₹1 lakh while the other offers ₹2 lakhs for the same period, SIP amount, and risk then investors will select the second fund to get better returns. Moreover, online calculators help investors to compare funds based on various other factors like Risk rating, volatility, and password performance thereby helping investors to make the right decision.
- Adjust investment strategy with changes in various factors:
A SIP calculator can even help investors adjust their investment strategy due to changes in various factors like income level, risk-taking capacity, returns generated, and availability of better funds. Using a SIP calculator, an adjustment in the SIP amount can be made depending on the rise or fall in the income level. Moreover, one can evaluate the best investment tenure to get the maximum amount of returns through compounding. A change in the mutual fund can also be made through an SIP calculator helping investors identify a better fund that offers more returns with less risk.
- Portfolio rebalancing:
Using a SIP calculator, investors can monitor and even re-balance their investment portfolio to get maximum returns and long-term growth. One can closely monitor their SIP returns at periodic intervals, and make a shift in the SIP amount or mutual fund to generate better returns. Moreover, one can consider the re-balancing of their total portfolio by selecting a single fund or multiple funds depending upon the benefits each decision delivers. One can opt for different types of mutual funds like hybrid, thematic, and debt for stable returns with minimal risk. Complete portfolio diversification is also possible through the use of an SIP calculator.
Conclusion:
A demat account along with an SIP calculator can help investors generate sufficient wealth which can help fulfill their financial goals like retirement. Through efficient use of a SIP calculator, one can make necessary changes in their investment strategy, opt for better funds, and even go for portfolio diversification. Depending upon the future value of returns, SIP investment, and other aspects, an SIP calculator can reduce guesswork and make long-term investing more reliable. Therefore, an SIP calculator serves as an essential tool in the wealth-creation strategy of an investor.
