By Admin 
SIP Mutual Fund News: Nowadays everyone does SIP for their bright future. This formula always seems simple. Start a mutual fund SIP, stay invested for 10 years, ignore market fluctuations, and the wealth will grow automatically. Simply put, ‘SIP is the future’, financial experts fully believe in it. Social media calculators make the money process automatic.
A person starts a monthly SIP of Rs 5,000 in different equity mutual funds. After a few years, the stock market crashes. The value of the portfolio falls. There is an atmosphere of panic in the news. Suddenly, continuing with SIPs seems absurd. But the investor still continues investing.
Investing does not guarantee becoming rich!
More mutual fund units were purchased when prices were low, leading to better long-term results when the market eventually recovered. However, experts warn against a big misunderstanding. 10 years can improve your chances. However, it does not guarantee becoming rich.
One thing to note is that, if you think that by investing through SIP for 10 years, profits are automatically assured, then experts say that this idea needs to be brought face to face with reality.
What did the expert say?
Adhil Shetty, CEO, BankBazaar, says, ‘Staying invested in an equity SIP for 10 years significantly increases the chances of getting positive returns, but it should not be considered a guarantee of profits.’ Also, equity markets are linked to fluctuations, global events and investor sentiments.
According to Shetty, what works in favor of SIP investors is long-term investment and rupee cost averaging. By making a similar investment, you buy more shares when the market falls and less when it rises. This naturally averages out your purchase costs over time.
Inflation playing important role in SIP
Even if your SIP amount keeps increasing, inflation gradually reduces purchasing power. In such a situation, if the prices of essential commodities continue to rise, then even a portfolio giving 10-12% returns will not look extraordinary. This is the reason why. Experts recommend increasing SIP contributions gradually with salary increases, regularly reviewing the portfolio and maintaining low risk. According to Kumar Bineet, the success of SIP depends not only on timing but also on many factors like asset allocation, consistency, expense ratio, valuation and investor discipline.
Patience will be beneficial, nervousness will cause harm
Different experts have different opinions regarding SIP. However, one thing became clear. 10 year SIP is not a shortcut to becoming rich overnight. This actually gives market fluctuations and interest a better chance to do their job. Some investors can create substantial wealth. At the same time, some investors may get disappointed if they choose a bad fund, stop investing midway or lose patience in difficult market conditions.