Do SIP really makes you Crorepati? - Check and invest wisely!!

Mutual fund investment is on rise and rate of increase is highest ever.  SIP (Systematic Investment Plan) is best and favorite tools for entering in Trading market. While you can invest in mutual funds as per your risk mood like low risk in Large Cap, moderate risk in Mid Cap and highest risk in Small Cap. But, recent losses in Mid Cap category have put new investor in thoughts!

New investors are thinking if mutual fund market especially SIP is still a safe option to invest in market or not. While we still see more and more investment in the market, the main reason could be “a blind sheep” approach or investor might be following as SIP is in trend.

If you fall in this category, then consider following before investing or re-investing:

1.       Do not get fascinated by what all are doing:

Do not invest in the market or SIP because your friend, neighbor, boss, telecallers are telling you to do so. Everyone has their plans and should invest as per their plans.

2.       Investment advice is bread and butter for Adviser:

If you are sitting with Financial Adviser, anything you ask will be sorted out by investing in SIP or mutual fund. For e.g. – You want a house, response will be to invest in SIP and when you have a good sum, purchase a house from it. However, it may be possible for you to purchase the house on EMI. Further, you can reduce your loan through savings in due course of loan.

3.       Stick to the plan:

If you are planning to purchase a house, car, home appliances, children marriage etc. then take all kinds of options in consideration and not just only SIP. Also, it is always better to build a portfolio containing various instruments like PPF, FD, MF, SIP, LIC, EMI, Govt schemes. All selected instruments should be chosen considering risk and returns.

4.       Keep it simple:

If you are, somehow, not able to understand any market investment scheme resulting in blind faith in your Adviser, I will suggest you to think again. You may better choose to invest in something which you can understand then suffering losses or earning tension because you do not understand that instrument. For eg – SIP investment can earn you little or negative earning initially or for a period up to 5 year (again even this cannot be assured). If you are not aware about this nature of SIP or market fluctuations, you may start worrying about your investment or may end up in losses by exiting.

If you are safe game player then ideally you should not head to Market as FD, PPF, NSC, LIC etc will be your friend. But, if you are aggressive enough and want some handsome wealth generation (but not quick) then you can start investing in Market.