3. Automate Stock Purchases via Broker Platforms
While SIPs in stocks are not as common as mutual funds, several brokers now offer stock SIPs. This means you can schedule the purchase of certain stocks at regular intervals.
For instance, you may want to buy ₹1,000 worth of stock for both Infosys and HDFC every month. Various platforms provide this feature. Here is what you will usually need to do:
➔ Select the stock and amount.
➔ Choose the frequency, that is, weekly, fortnightly, or monthly.
➔ Confirm the mandate.
4. Enable Auto-Rebalancing With Automated Advisors
Over time, your portfolio may drift away from your intended asset allocation. For example, if equities outperform debt, your risk level may increase unknowingly. That is where auto-rebalancing helps.
Some platforms offer goal-based investment tools that automatically rebalance your portfolio based on:
➔ Time left to the goal
➔ Market performance
➔ Risk profile changes
5. Set Up Alerts and Auto-Reports
While automation handles investing, staying informed is equally important. Most broker platforms offer:
➔ Email/SMS alerts for investment transactions.
➔ Monthly portfolio reports are sent to your inbox.
➔ Performance trackers to see how your investments are doing.
6. Use Recurring Deposits or Sweep-In Accounts As a Buffer
If you are worried about maintaining sufficient balance for SIP debits, consider:
➔ Setting up a Recurring Deposit (RD) aligned with your SIP dates.
➔ Using a sweep-in savings account where idle money earns FD-like interest but is liquid.
7. Review Once A Quarter
Automation does not mean “set and forget” forever. It means to set and review periodically.
➔ Every 3-6 months, review your goals, asset allocation, and fund performance.
➔ If your income or expenses change, update SIP amounts accordingly.
➔ Revisit risk levels and adjust the investment instruments if needed.
Closing Thoughts:
Your first step into the world of investing is to open Demat account. However, consistency is necessary to increase your wealth, and automation offers just that. Establishing a financial routine that operates in the background can be achieved by making stock purchases, SIPs, rebalancing, and notifications.
Automated investing helps you achieve your goals, one step at a time, whether your goal is retirement, home ownership, or building a corpus for your child’s education.
FAQs
1. Can I automate investments for different goals, like retirement or education?
Yes, many platforms offer goal-based investment options where you can automate contributions for multiple financial goals simultaneously.
2. What happens if there is an insufficient balance in my bank account during auto-debit?
The transaction may fail, and you could incur a penalty or miss that month’s investment. Using a sweep-in or recurring deposit account as a buffer can help avoid this.
3. Do I need to manually invest every month if I have a SIP?
No, once you set up an SIP with an auto-debit mandate, the investment amount is automatically deducted and invested at the scheduled time.
4. Can I automate stock investments like I do with mutual funds?
Yes, many brokers offer stock SIP features that allow you to buy selected stocks in fixed amounts or quantities at regular intervals.
5. How do I stop or modify an automated investment?
You can pause, stop, or change the amount of your SIPs or stock investments at any time through your broker’s app or website.