Rupee Cost Averaging is a Systematic way of earning the money in the stock market through SIP (Systematic Investment Plans). In the Strategy of Rupee Cost Averaging, the Investor has to invest a certain amount with a fixed time interval.
Through Investing in a fixed Schedule, Investors can get Rid of the Complex duty to Figure Out the exact time to invest. This system ensures that you buy more shares when prices are low and vice – versa.
How Does Rupee Cost Averaging Strategy Functions?
- In this Rupee Cost Averaging Strategy, we minimize the Guessing Game of Right Time, Emotions, and Market Fluctuations per se. This is prominently a very effective Way for Investors and beginners as well.
- This system doesn’t work on the Forces of Market’s Ups and Downs. Even it suits best for Long term plans.
- Even though the Amount of Investment depends upon the person Only. they can invest whatever amount they want. But once it’s fixed it can’t be changed. It has to be Consistent.
- This way saves many Uncertain losses due to Wrong Timings only. This way also ends the confusion regarding the different money Amount, Which is being Spent.
- Let’s Understand with an Example and Table Below –
|MONTH||AMOUNT INVESTED||RISING MARKET||FALLING MARKET||VOLATILE MARKET|
|NAV||Units Allotted||NAV||Units Allotted||NAV||Unit Allotted|
|Average Purchase Price||130||70||100|
|Average Cost Per Unit||126.10||62.33||97.96|
- This would be helpful for long-run investments. As it will cost out the Average of purchase.
- Moreover, Rupee Cost Averaging Works well Under the Mutual Fund SIP, where an Investor can invest in a Particular Amount with a Specific Scheme per se. In simple Words, Rupee Cost Averaging is the Power of SIP(Systematic Investment Plans).
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How To Invest In Rupee Cost Averaging?
There is a Particular Way Or Steps that Addresses, How to Invest money in a Systematic Investment Plan. However, these steps are as follows –
- Step – 1) The Investor Should Understand the Risks and Objectives of Investment as well.
- Step – 2)They shall choose a Mutual fund for investment.
- Step – 3) Further, they shall select a date for SIP.
- Step – 4) Should decide the Duration of SIP As well.
- Step – 5)They shall decide the mode of Investment as well whether Offline or Online.
- Step – 6) Stay Invested till the end of your Duration.
When To Invest In Rupee Cost Averaging?
If you Ever Wondered that When should be the exact or ideal time to invest in SIP. then the answer is simple. As the Person Doesn’t need to look for Markets Ups and Downs.
Thus, an investor can invest any time they want. There are no Specific Protocols Regarding the time.
What Are the Advantages of Investing In Rupee Cost Averaging?
There are many advantages of investing systematically in Rupee Cost Averaging are as follows –
- Investors will definitely get the maximum profit of their investment as a whole.
- It easily helps an investor to get an average cost by doing Purchases in both falling and Rising Markets.
- It also gives the Investor more units at the same amount even when the market is falling.
- This method also helps to get rid of keeping a Track of Market ups and Downs. An investor can Invest any Time they want.
- This way of gradual investment helps to not face the pitfalls of the market and keep the record of the market daily.
Conclusively, By Investing in SIP, the overall market gains will increase. A SIP is an Easy Way of Doing Investment due to Rupee Cost Averaging. This Way SIP helps you to lower Yoru Investment costs and Maximize the Profit returns. However, This also doesn’t require you to worry about the Market Timings.
Although as a matter of fact, In Financial World there are many people, who’ll Claim to Provide You with every Information about the fluctuations in the market. But a wise investor should never trust them. There is Hardly anyone who can consistently look for the market ups and Downs. As it is so much Rigid to look out every Aspect. Moreover, many experts Consistently predict the market moves by their Sheer Probability.
Unfortunately, there is no Guaranteed Way to do that.