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Mutual Fund and SIP FAQs – Myth and Reality

by | Last Updated On October 13, 2022

Mutual Fund and SIP FAQs – Myth and Reality. Mutual Fund and SIP Myths Busted!

There are Mutual Funds. There are SIP. And there are Myths to be Busted. Let us Burst some of the Myths associated with Mutual Fund and SIP and understand the Reality.

Mutual Fund and SIP FAQs – Myth and Reality

FAQs: Mutual Fund and SIP

No, all open-ended mutual funds have NO lock-in except for closed-ended and tax-saving funds. You can withdraw money any time per your requirement.

SIPs are always flexible. You can easily alter, pause or stop/close your SIP as per your choice.

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You should always continue with your existing SIP even when the market falls as it helps reduce the average buying price and it amplifies your long term returns.

There are over 4.5 crore active SIP accounts in India. Millions of investors prefer investing through SIP so you should.

You can accumulate solid wealth over a longer period by investing a small amount every month via SIP. Longer you invest, the larger it gets!

SIP Inherits Automated Monthly Investments & Flexibility. SIPs are the path to become a disciplined investor. SIPs can be easily altered, paused or resumed with no penalty.

Do not stop your SIP during market fluctuations and do stay invested for the long term to gain maximum benefits.

Compare Long-Term Returns Of SIPs Based On Date And Not Month or Year. And, that is how you will get to know the best date that you can pick to do your SIP for better return. Irrespective of the SIP date, the annual returns from SIP have stayed in a range of 14.28% to 14.42% p.a.

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SIP date has no major impact on long-term returns. But, having a SIP date closer to your salary pay date helps you invest before you spend.

Stock Market Volatility and SIP

Are you worried about the stock market volatility impacting your investments? Here’s how you can overcome.

Stock Market Performance in the last 10 Years.

Investment of Rs. 10,000 monthly with an annual average return of 15.0% grew close to Rs. 42,000 in the past 10 years till Dec 2021.

Monthly returns over the last 10 years came with many Ups and Downs.

47 out of the total 120 months in the last 10 years saw negative returns. But those who stayed invested for 10 continuous years earned a return close to 15.0% p.a.

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Conclusion

Stay invested through short-term ups and downs to earn better returns in the longer run. And to reduce risk and benefit from market ups and downs, invest via SIP.

So go ahead and pick a SIP date that suits you & start investing!

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Ramesh

Ramesh Kumar Das is a Young and Dynamic Software Engineer, Blogger and Young Entrepreneur and Investor. He holds a Master's degree in Computer Software and has worked for some of the largest investment banks in the world, starting 2011 till date. He has exposure to the banking domain that includes Investment, Core and Retail banking.He has a job profile of a Lead Data Analyst and has an extensive knowledge on both fundamental and technical analysis of banking data. At present he has more than ten years of real time knowledge on Investment Services and it’s still counting. He possesses vast experience in the field of Stock Market, Mutual Funds and Investment Portfolio Management. Keep visiting for daily dose of Share Trading Tips and Tutorials.

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