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Discontinuing Your Mutual Fund SIP Now Could be a Mistake


Most investors are worried due to their SIPs giving unexpectedly lower returns. As reported earlier, only a few equity schemes have given double-digit reruns in the last one year. Amfi data on SIP collection shows muted growth in the months of April, May and June. Number of SIPs discontinued is also on a rise. But stopping your SIPs at this time could be a mistake. This is the time when your mutual fund SIPs will actually be working harder to stun you with good returns as soon as the broader markets go up.

Kalpen Parekh, President, DSP Mutual Fund, in a tweet said, "When will SIPs work - just when it starts feeling that SIPs don’t work." He adds, "SIP installments in flat to negative trending markets earn the best returns."

How SIP installments in negative markets earn best returns?

This may actually be the worst time to stop your SIPs. The best you can do to your investment portfolio at the moment is to continue with your SIP in mutual funds, provided you are not facing any financial trouble due to job loss or medical emergency created by the ongoing pandemic.

Source : Live Mint

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