A drop in the equity market and the rising tension in US-China trade relations have createdfear amongst investors. Many investors are moving away from the stock market but the market leaders are advising investors to begin accumulating stocks of strong companies to build wealth in the long term. Like in mutual funds, it is possible to set up a Systematic Investment Plan (SIP)in the equity market. You can make regular, systematic investments in order to beat the volatility of the market. The idea behind SIPsis to create long-term wealth in a disciplined manner.

Most investors think that SIPs are only suitable for mutual fund investments but this is not true. If you do not want to invest in an entire portfolio of a mutual fund, you can choose to focus on a few stocks and set up SIPs. It is a good opportunity to get more stocks and build your portfolio in a well-planned, systematic manner. A prudent approach will help you build a strong portfolio of stocks over a period. It will help beat the volatility in the market and result in long-term wealth creation.

You can use the SIP calculator to estimate the amount of SIP you will need to invest each month. The calculator is available online and all you need to do is provide the SIP amount, expected rate of return, and the tenure. The SIP calculator will help you determine your total investment corpus and the estimated returns once the investment period ends.

SIP in the equity market can help bring down the risk of timing the market by averaging out benefits. You can invest a pre-decided amount or choose a certain quantity of stock at regular intervals in the long term. With consistent investment in the stock, you will be able to buy more units when the price is low and fewer units when the price rises. Hence, when you buy a certain quantity at regular intervals, you will be able to average out the cost. You need to be very clear about the stock you are investing in when you use SIP to build an equity portfolio. Get an insight into the price of the stock for two-three years or more. The volatility in the market is expected to continue for some time and if you want to build a strong stock portfolio, this is the best time to make a move. Carry out market research and understand the financial stability of the company before making a decision to invest.