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Mistakes You Should Avoid To Help Your Money Grow Through S I P

Mistakes You Should Avoid To Help Your Money Grow Through S I P

A Systematic Investment Plan allows investments (small amounts) at regular intervals to yield high returns over a long period of time.

SIPs help you build your wealth gradually without hurting your financial commitments rather than just investing a lump sum amount. It has the power of averaging and compounding which makes it a smart investment option-

There are some common mistakes investors make:-

 

Deciding huge amount for investing

Investors make a mistake on not calculating their present and future financial capabilities before committing high investment amount.

+ What to do?

Set a realistic amount for monthly SIP investments by evaluating your financial condition such as present and future salaries, expenses and contingencies.

Investing for one year

It is an extremely small duration. Many investors try to get the benefits of SIP through one year investments but you need to consider the volatile nature of market.

+ What to do?

In fluctuating market scenario SIPs are best option as they help you benefit optimally from sip investments.

Discontinue SIP in falling market

Market volatility drives the decision of investors who discontinue their SIPs when market falls.

+ What to do?

Your investment commitments in SIP must not get influenced by the market moods. The ill-effects of wrong investment time are reduced due to investment being spread over different months of the year.

Choosing dividend over growth

Investors usually prefer taking dividend option to withdraw part of the earned SIP benefits regularly. It defeats the amazing power of compounding that SIPs are known for.

+What to do?

Allow the dividend to be reinvested to gain compounded wealth at the end.

Invest and forget

Investors forget to monitor and renew the investments made in SIPs. You need to keep a watch on your investments.

+ What to do?

Replace the non-performing mutual funds with those of funds which have high probability of good returns by evaluating your portfolio frequently.

By avoiding these mistakes you will be a smart investor with right insight for handling SIPs.

 

To know more, contact us at – info@myanmol.com / 080-40463150

Written By – “Jinal Solanki”

 

 

 

 

 

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