7 Confusion about investing through SIP – Nowadays a lot of people invest in mutual funds through SIP. But there are also many people who get many big ideas after hearing words like mutual fund SIP and investment. It is a simple task for many people, then many people feel that it is not theirs. You are afraid of doing any work, it means that you have incomplete information about it or whatever little information is wrong.
7 Confusion about investing through SIP
Many people have a lot of confusion about SIP, due to which they are afraid to invest in mutual funds. In this article, we are going to talk to you about 7 such confusion about Systematic Investment Plan i.e. SIP which are often in the minds of people.
1. For small investors only
Many people think that SIP is only for small investors. In SIP, you can invest up to 50 rupees or ₹ 500, but this does not mean that you cannot increase your amount in this. SIP works for small investors as well as big investors.
Through SIP you can invest up to ₹ 100000 or more in mutual funds. Or depends on you how much you have to invest through SIP and how much your goal is. That is why today, remove the illusion from your mind that SIP is only for small investors.
2. Investment product
Some people think that SIP is an investment product, so for your information, let us know that SIP is not an investment product, but it means Systematic Investment Plan, through which you can invest in mutual funds at regular intervals. Some people think that one has to invest in SIP whereas it is not that you do not invest in SIP, rather you choose the mutual fund in which you want to invest through SIP. You choose equity or debt mutual funds according to your risk capacity.
3. Do not SIP at the time of market surge
Many people think that when the market is buoyant, do not do SIP, but when the market is down, then you will invest through SIP. People who think so think wrong. By doing SIP for a long time, market fluctuations have no effect on your investment. If you do the same on a regular basis, you get more units when the market is down and fewer units when the market is up. In such a situation, if you have done SIP for a long period then there is no effect of market fluctuations.
4. SIP amount cannot be changed
Many people think that the amount of SIP cannot be changed, but for your information, tell us that you can reduce or increase the amount of investment of SIP at any time. Apart from this, you can also decrease or increase the investment time frame. For some funds, there is a minimum SIP amount and time limit, but to change it, you have to fill the form with some documents.
5. Stop the SIP when the market is down
Many people think that SIP should be stopped when the stock market declines. But when there is a decline in the stock market, you get more and more units through SIP, so if you stop the SIP, then you can miss a great earning opportunity. If you stop investing through SIP when the market falls, then you will fail in the purpose for which you are investing. But keep in mind that after the market is down, you should invest only in good mutual funds and keep doing regular SIPs.
6. Run SIP for many years
Many people think that by keeping the amount invested in SIT for years, you can accumulate good money. But this is not the case, you should keep increasing the amount of your SIP investment from time to time. Just as the salary in your job increases every year, you should also increase the amount of SIP investment.
7. SIP guarantees returns
If you think that by investing in mutual funds through SIP you get guaranteed returns, then you think wrong. Mutual funds are associated with the stock market, so the way in which the fluctuating effect of the stock market occurs, your returns are also affected. But if you invest through SIP for long term then you can get good returns. Because it often happens that the market of the mutual fund you are investing in is down in the middle, but later it gives you a good advantage.