Mistakes to avoid for SIP investing plans - YP Buzz Finance

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1. Setting Unattainable Goals

A common mistake made by many investors is to set an unreachable goal that cannot be monetized in a timely manner. e.g you may want to retire early. But there are a number of things to consider, such as defining your retirement age, your target age, and what you will be doing after retirement. Setting an achievable and unprecedented goal can help your SIP achieve the goal based on the funding levels of the system.


2. Choosing the wrong goal plan

In their quest for higher returns, some investors often choose strategies that may not be appropriate for their risk profile. After that they end up constantly worrying about market fluctuations and portfolio. Therefore, keep an eye on your financial goals, length of time and your willingness to risk choosing the right plan.

3. Investing in Equity SIPs temporarily

When investing in stocks, it is recommended that you invest regularly. To achieve short-term goals, you may want to invest in programs that guarantee stability and high-value purchases such as liquid funds, or short-term / short-term debt financing.

4. Having a high SIP value

There is no limit or maximum value for starting SIP; you can invest as much as you can. However, you should keep in mind that you will have to stick to the SIP amount, until it is time to invest. Therefore, before starting a SIP, check and determine the amount you can afford. Use the SIP calculator to determine your budget and risk appetite and determine the appropriate amount of duration.

5. Setting a minimum SIP amount

While most mutual fund schemes allow you to invest at least ₹ 500, keeping a small amount for the entire SIP period may not be a good idea. That’s because an extremely low SIP amount may not be able to cover your real purpose, such as your retirement, sponsoring a marriage or meeting your children’s educational expenses, etc. The correct way to set a SIP value is to define your intentions and provide value with an estimated return value. Use the SIP calculator to find the result and set the appropriate SIP value to refer to.

6. Communication of SIP during market downturn

Investing in financial instruments works best with a clear long-term timeline and the target price available. However, the inclusion of cell phones in the SIP during market adjustments could negatively affect your investment. Have a set time to invest so that you can withstand market volatility and remain patient despite the ups and downs of the market.

7. Review periodically SIP performance

Reviewing and re-evaluating your investment portfolio should be like a hygiene test. Having a very short gap when reviewing and re-evaluating your portfolio will not give you the results you want.

Setting up a SIP is a wise investment behavior; simplifies your financial life. It removes the burden of deciding when to make each investment and allows you to continue your commitment to investing in a mutual fund program before you even have the opportunity to use it.

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 YP Buzz

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