News of SIP taking a hit

"SIPs take a hard knock on market volatility
BS Reporter / Mumbai April 28, 2009, 0:41 IST
Once the most selling product in the mutual fund industry, systematic investment plans (SIPs) are now taking the hit as investors pull out, fearing that adverse market conditions are going to continue."
This news shows the lack of awareness of the investors regarding SIP investments. SIP in Equity funds is essentially to avoid timing the market. If someone is able to identify the market trends in advance accurately, he can afford to investment in the market by timing it. Unfortunately , there is no one person who knows the future graph of the indices.
When the market was moving up, everyone were happy to enroll in SIP as they could see their investment grow month on month. Continuing to SIP in a bull market is a tough proposition , but you will reap huge benefits , if you continue with your investment in a bear / volatile market.
SIP in Equity should be done with the following in mind
2. Only funds that are not required in the long run( at least 5 years ) is invested in equity.
If you are understand out 1 and 2 , you wouldn't be an investor who stops his/her SIP in a volatile market.
Know the power of SIP !! and use it to the fullest to make you rich.

1 comment:

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