Your Journey of SIP In Mutual Funds

SIP in Mutual Funds is something we frequently hear about from our friends, relatives, TV, newspapers, and other sources. We began SIPs as well, but then came events such as the March 2020 market crisis caused by COVID-19, followed by a market recovery in 2021. We’ve been through both the Bear and Bull phases.

I’d like to touch on a few essential aspects connected to SIP in Mutual Funds in this article, which you should be aware of if you’re doing SIP in Mutual Funds.

SIP In Mutual Funds Protects from Wealth Destruction

Investing in mutual funds through a systematic investment plan (SIP) protects you from losing your money. If you’re new to mutual funds and have heard a lot of good things, there are situations where investors see triple-digit returns on 1-year mutual fund performance all over the internet and feel compelled to invest Rs.20 or Rs.30 lakhs right away in order to see their money double in a year. But I strongly advise you not to do so – don’t do it!

The ideal strategy is to invest systematically and through different market cycles; Just don’t panic if the market collapses; and after you understand how the market tests your patience across different cycles, you’ll be ready to make one-time investments as well.

An Averaging Tool

This benefit of investing systematically is always mentioned when discussing the advantages of SIPs in mutual funds, but it is rarely used because every time the market falls, giving you the opportunity to do rupee cost averaging, investors panic and decide to stop their SIPs, citing reasons such as “Let the market fall further, we’ll invest lumpsum at lower levels.”

This never happens since no one can accurately predict the market’s lower or higher levels. As a result, SIP is regarded as the finest averaging strategy, providing you with benefits in a systematic manner while also increasing your wealth.

SIP Performance

In the last ten years, SIPs in various Mid & Small Cap Funds have earned a CAGR of more than 19 percent, with monthly investments of Rs. 1,00,000 growing to more than Rs.3.43 Crores (Total Investment Rs.1.20 Crores)

Not only have these funds consistently outperformed the market, but the equity market as a whole has also returned more than 16 percent over the last ten years.

Conclusion

SIPs in mutual funds are for consistent and long-term wealth creation; those who endure the pain in the short term only benefit from the long-term gains. Equity investments are not suitable for you if you cannot see the volatility in your investments. But keep in mind that without equity, it is difficult to outperform inflation and earn real returns in the long run. So, when it comes to wealth creation, be wise and act prudently when the market presents you with opportunities to invest.

Let’s start your SIP with us so that we can provide you with assistance whenever you need it. Go to gurpreetsaluja.com/invest and submit your info for a callback.

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