SIPs or not


Many numbers of investors have been investing in the Equity market. There are those who have been investing for years the mature investors. And then there is the newbie which has started investing from just a few months or last year. Now with the equity market going down, in the past week, the new investors are really worried seeing their portfolio down by 10% or so. These are the ones who invested in the equity market, utilizing the Systematic Investment Plans (SIPs). If you too belong to the latter category, you may also be worried. It is important in here, to understand that, do you really need to worry or get perplexed as this is just more opportunity for you to accumulate from the market. In order to throw light on this matter, here listed are some of your queries and their solution.

How much down the market can go?

The market can go down as low as 7,000 or 6,000 or lower. There are also chances that it may go up again to the level of 8,500. This is not which anyone can predict absolutely correctly.

Is it alright to discontinue the SIP?

When you have set your foot front to invest in SIP, just a little decline in the market should not let you go away from this platform. You need to remember that as soon as the market goes to the uptrend, there is likelihood that you will be able to get higher returns.

How do you get success in the field of SIPs?

If you are an investor and approach a financial planner for the investment portfolio, then there are a lot of probabilities that the planner will recommend SIP investment to you. There is a simple thought behind this, and that is that just like the Indian stock market, the Indian economy will do well too. When you start believing in this foundation that is when you start doing well in the SIPs.

At which level should the investor buy?

The SIPs work in a very simple manner. In here, you are required to invest a fixed amount of money every month. When the markets go higher, this is when you get a lesser number of units. However, when the markets are at low, you get more number of units. So in here timing the market is of no use, since this is not probable with SIPs.

How is trading different from investing?

With trading they are away from the market until and unless they witness the sign of recovery. Traders have a different viewpoint and then witness the profit from the short term movements. However, you are an investor and you should look for long term wealth. Hence, as an investor, you need to stick to the investment discipline.

So whether the market goes up or down, you need to understand that this is the way the market is volatile as well as unpredictable. Hence, just remain adhered to the investment discipline and continue with the SIPs. It is definitely risky but the returns are worth all the risk.


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