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.

Investment Tips: In today’s time, many investment options are available. But SIP i.e. Systematic Investment Plan has become the first choice of the people. The biggest reason for this is that there is no need to invest a huge amount at once. You can start small and build a larger fund over time.

Employed people, small investors and first-time investors prefer SIP because it is easy, automatic and teaches discipline. Regarding SIP, it comes to people’s mind that can one really become a millionaire by investing Rs 1000 every month? Know its calculation

How to make Rs 10 lakh from SIP of Rs 1000?

Often people think that it is impossible to create a big fund with a small amount. But the real game of SIP is timing and compounding. If you invest Rs 1000 every month and continue it for a long time, your money gradually grows.

In the initial years the progress is less visible. But after some time, returns start coming on returns also. This is the wonder of compounding. This is why it is more important to start early in SIP than to have a large amount. The longer the time. The pace of fund formation will continue to increase.

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Understand the complete mathematics from SIP calculation

If an investor invests Rs 1000 every month in SIP and gets an average return of 12 percent annually, then in about 21 years his fund can reach around Rs 10 lakh. In these 21 years he will invest a total of about Rs 2 lakh 52 thousand. According to estimates, the amount on maturity can be around Rs 11 lakh 39 thousand. In which only about Rs 8 lakh 87 thousand will be returned.

Whereas if we talk about the target of Rs 1 lakh. So it can be completed in about 6 years. That means by investing only about Rs 70 thousand your fund can cross Rs 1 lakh. This shows that the real power is not of money, but of time.

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Should the SIP be stopped or continued if the market falls?

When the stock market falls. That’s when the most nervousness is seen among SIP investors. People start thinking that their money might be lost and decide to stop SIP. But this is the biggest mistake. Falling market means that good funds are available at cheap prices. SIP done at such time gives more units in future. Which gives big benefits as soon as the market stabilizes. The real benefit of SIP lies in the ups and downs. Therefore, decline should be seen as an opportunity and not a fear.

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