North India Statesman
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News India Live, Digital Desk: When the stock market declines a major decline or the market volatility increases. When the stock market falls, many investors get nervous and shut down SIPs. But in that case, continuity is more important. Continuing SIP even at the time of decline in the stock market can be beneficial for long -term benefits. Therefore, before taking any decision, you must know these important points…
Then, SIP Through many people who invest in mutual funds come in mind. Does this mean that SIP should be shut down?
What to do in such a case?
1. Closing SIPs or withdrawing money immediately for fear of decline in the market can often be suicidal decisions, especially if you are investing for long periods. Remember, the stock market is always up and down. In such a situation it is important to remain calm and take a decision with thought.
2. If you are very concerned about market status and it is not possible to invest in SIP for some time or it is risky, you can consider ‘poses’ feature instead of closing mutual funds. This feature allows you to stop your current SIP for some time. During this period, the installments of SIPs will not be deducted from your bank account and your SIP will automatically resume at the end of the ‘restriction’ period you have chosen. But remember, ‘poses’ feature is not very beneficial for long -term investors, as it breaks your investment continuity and prevents you from getting full advantage of compound interest.
What should you keep in mind while investing or continuing?
Whether you are starting a new SIP or continuing old, it is very important to choose the right fund. Choose funds based on your risk tolerance, investment purpose and time period. Take the help of financial advisor if necessary. Do not invest all your money in the same type of funds or the same area. Bring variations in your portfolio. Keep some date funds and large cap funds in it. Because when the market has large selling in the mid-cap and small-cap stocks, it directly affects these funds and the loss can be more. If you are investing for at least 7 to 10 years, there is no need to fear temporary market fluctuations.
Ultimately, it is important to be clear about your investment objective before taking any decision about SIP. How long are you investing? If you have invested for a short -term or medium period and the time has come to withdraw your money, but the market is currently losing losses, if possible, consider waiting for a few more months. Often, there is a possibility of improvement in the market after major events. If you are investing for a long period, see the current recession as an opportunity. Due to low NAV, you will get more units, which will benefit you in future.
What is SIP?
SIP means systematic investment plan. Through this, the investor can invest a certain amount in a mutual fund scheme every month or at regular intervals. SIPs provide discipline in investment and In the market Reduce the risk of fluctuations. You can also start SIP from Rs 500. 500 per month. Large amounts can be raised from regular and long -term SIPs.
