Keeping in mind, that all investors are not familiar with the financial jargons, Stock SIP is a kind of mechanism which allows the investor to invest in a single stock at regular intervals. It is your will whether you opt for specific quantity to invest or amount to channelize. The main agenda behind adaptation of Stock SIP is to dodge the volatile times in a less affected manner. Let’s face it; we are not inculcated with the financial skills that can help us in scrutiny of all companies and finding a blockbuster pick which can bring a fortune in future as investment bankers with fancy degrees from top B-schools have. And investing in that pick (found after sleepless nights) while equity market is going through an oversold situation in market will get tongue under the teeth.
History has advocated the fact the investing in stocks through SIP route has been a profitable venture for long term investors as it helps to make ample investment for those investors who don’t have surplus funds to invest altogether. Moreover, it prevents you from slaughtering in times when bears take over the driving seat and make the specific stock a consistent compounder into our portfolio.
As algorithmic trading is overcoming the drawbacks of conventional trading methods, it won’t be difficult for the tech-savvy brokerage houses to bring an algorithmic product for its customers which will provide signals of oversold situation in the market. This may help investors to benefit the classic situation of “Buy on Dips” and steady their psychology towards trading in turbulent times.