Mutual fund SIP is a Systematic Investment Plan. SIPs are the only mode of investment through which we can invest in the most convenient way to invest in the equity market. This method of investing is not your only option.
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It allows an investor to invest a fixed amount regularly. It is designed in such a way that no one has to waste time searching correct mutual funds or keep an eye on the Stock market. You just need to find a fund scheme and start a SIP. Generally, People take advice from a personal finance adviser too but they fail sometimes.
5 Mistakes to Avoid While Investing Through SIP
Here are some common mistakes people make while investing in SIP:
1. Correct SIP amount
One should know the correct amount to invest in SIP. Many people make mistake by investing huge money at once without knowing the current status of the fund. Sometimes it causes loss to the fund and investors quit. So, it’s very important to know, what the correct amount to invest in SIP is.
2. Invest for Long Term
A common mistake is found that investor withdraws the SIP in the short term which does not get the ultimate profit. One should be invested in SIP for the longest tenure. It is designed for longer tenure to enjoy the benefits.
3. Waiting for the Stock Market to be on a Better Side
One waits for the stock market to be on the better side before investing in SIP. SIP is designed for longer tenure so the stock market will perform in an up and downtrend. There is no proper time to invest in SIP. The earlier you start better your return.
4. Periodically Increasing the Amount
SIP amount needs to be increased with an increase in our income as one tends to continue the same amount of investment in SIP. We need to understand the inflation rate changes and the value of Rs 1 lake at present will be Rs 40 thousand after 25 years.
5. Picking up the Wrong Fund
Often people don’t know which fund will suit their needs and they invest. Probably the mistake that 80% of people make. One should know his goal and return then analyze accordingly the fund on which he can depend upon. Before finalizing the scheme you need to check the past performance, current portfolio, and expense ratio.
The people who can’t invest a lump sum amount in a mutual fund can start investing in a mutual fund through SIP to get a good return. SIP can complete all your financial goals if invested properly. The investment return through SIP is on the higher side if invested for a longer tenure. One should always keep a check on a mistake which people generally do.
Make a financial goal of your own and start investing through SIP to fulfill the same. SIP is a sure-shot higher-return investment tool for an investor. Before picking the scheme one should analyze the same before investing. People tend to make the mistake of picking the wrong scheme in SIP.
Selecting a fund scheme is the main research to be done as an investor. A different fund has a different portfolio for different customers. A fund is divided into a Growth fund and a balanced fund. The fund portfolio is created by keeping the customer’s appetite for risk. One should wisely choose their fund scheme to make their money grow at a higher rate.
Some of the Best Schemes Present in the Market of SIPs Are:
- SBI Bluechip fund
- HDFC balanced fund
- Kotak Select focus – Regular
- L&T India Value FundHDFC Mid-Cap Opportunities Fund
Also Read: Top 10 SIP Mutual Funds to Invest for Future Growth
SIP can fulfill your entire financial requirement if invested properly. The SIP interest rate returns generally between 6% to 30%. One needs to continue for the longer term. In the market, we can find a SIP calculator also to forecast our return if invested periodically for a while.
SIP does it all for you without thinking a single minute over it. It grows as the market grows but SIP demands discipline. One should not panic as some people tend to panic when the stock market declines. In a panic, they withdraw their fund and lose all their profit.
Many people make mistakes by keeping an eye on their SIP investment which should not be done as the market fluctuates at regular intervals. Before concluding I just want to add SIP is the mode of investment at present that is outperforming the other sector just go for the longer tenure and avoid the mistakes.
