Want to stop SIP? Read this Reditt user's advice
Are you on the verge of closing your systematic investment plan (SIP) or withdrawing lump sum investment in equity mutual funds because of crashing share market? Stop, for a minute and read what a Reditt user has to say. The user writes how their patience has led them to take their corpus from a mere Rs 51,420 to Rs 2.10 crore in 15 years. And guess the user’s annualised return at a time when you are thinking of closing your SIP. It is 17.1%.
To put it into perspective, a Rs 10,000 monthly SIP in 15 years will grow to Rs 74 lakh at a 17.1% annualised return, while the total investment in the same duration will be just Rs 18 lakh. The user has also shared the screenshot of their investment holdings. But the user doesn’t want you to be awestruck at astronomical numbers of their corpus. Rather, the user wants you to know the recipe of their success in their investments.
8 pearls of investment wisdom that the user wants to share-
Market goes up and down when it is down, you can accumulate more units for the same price, and when it is up, you feel happy that your patience is rewarded. Don't look up for star ratings, they are short term behaviours, analyse funds with logics. Always prefer direct plan over regular funds. In the long-term, direct plans win in returns. Learn about mutual funds, it is fun and easy. Periodically review the funds. Prefer funds with a low expense ratio Invest only what you can spare When the portfolio is down, never delve so much, it comes back strong if you have done your homework well before investing. Stay invested! The user, in the end, writes that these are their personal opinions.
As an investor, the user’s advise can come handy for you. However, it is always good to do your own due diligence or consult an advisor before investing.
Corpus created from different SIP amounts at 17.1% annualised rate in 15 years
To give you an idea how large a corpus different amounts of SIPs can create in 15 years at a 17.1% annualised rate, we present you the calculations.
SIPs do their job well even market is down; what experts have to say
Saurabh Jain, co-founder & CEO, Stable Money, says one common mistake investors make is pausing SIPs during market slumps, when in reality, these phases often offer the best opportunity to add value.
"Continuing SIPs and making lump sum top-ups during corrections, along with stepping up contributions as income grows, allows investors to accumulate more units at lower prices-helping portfolios grow faster than inflation and protecting real purchasing power over time," says Jain.
Talking about the long-term SIP investment strategy, chartered accountant Foram Naik Sheth, KMP, Wealth Management Solutions, NPV Associates LLP, says one should pick a long investment horizon when it comes to SIP investment in equity funds as it allows investors to benefit from compounding and rupee-cost averaging for significant wealth creation.
"The key consideration is the risk profile of the investor in an investment. Conservative investors should lean on large-cap or hybrid funds for greater stability, while moderate investors can consider flexi-cap or multi-cap funds for balanced exposure," says Sheth.
To put it into perspective, a Rs 10,000 monthly SIP in 15 years will grow to Rs 74 lakh at a 17.1% annualised return, while the total investment in the same duration will be just Rs 18 lakh. The user has also shared the screenshot of their investment holdings. But the user doesn’t want you to be awestruck at astronomical numbers of their corpus. Rather, the user wants you to know the recipe of their success in their investments.
8 pearls of investment wisdom that the user wants to share-
As an investor, the user’s advise can come handy for you. However, it is always good to do your own due diligence or consult an advisor before investing.
Corpus created from different SIP amounts at 17.1% annualised rate in 15 years
To give you an idea how large a corpus different amounts of SIPs can create in 15 years at a 17.1% annualised rate, we present you the calculations.
SIPs do their job well even market is down; what experts have to say
Saurabh Jain, co-founder & CEO, Stable Money, says one common mistake investors make is pausing SIPs during market slumps, when in reality, these phases often offer the best opportunity to add value.
"Continuing SIPs and making lump sum top-ups during corrections, along with stepping up contributions as income grows, allows investors to accumulate more units at lower prices-helping portfolios grow faster than inflation and protecting real purchasing power over time," says Jain.
Talking about the long-term SIP investment strategy, chartered accountant Foram Naik Sheth, KMP, Wealth Management Solutions, NPV Associates LLP, says one should pick a long investment horizon when it comes to SIP investment in equity funds as it allows investors to benefit from compounding and rupee-cost averaging for significant wealth creation.
"The key consideration is the risk profile of the investor in an investment. Conservative investors should lean on large-cap or hybrid funds for greater stability, while moderate investors can consider flexi-cap or multi-cap funds for balanced exposure," says Sheth.
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