New Delhi. Today most of the investors invest in Mutual Funds only through SIP. Because through this you can invest in installments. Therefore your investment amount has little or no impact on other expenses. Seeing the attractive returns of mutual funds, people invest in them enthusiastically, but they also exit from them equally quickly.
Because it is not necessary that you get attractive returns in mutual funds. There are some funds which lose investors' money. Today we will tell you about 5 such reasons (Why Mutual Fund SIP Stop), due to which people are leaving Mutual Fund SIP.
1. Expecting quick returns
Often investors consider SIP as a short term investment. But we also see its benefits in long term investment. It has been seen that if a fund does not give the expected returns in 6 or 1 year then it is considered worthless. Patience is most important in mutual fund SIP.
Initially, investors get excited and invest large amounts of money. But later their increasing expenses outweigh their investments. In such a situation, they have to stop SIP of some funds. You can use the 50:30:20 formula to decide how much to invest in SIP as per your salary.
50%- for essential expenses
30%- For hobbies or favorite expenses
20%- for saving or investment
When there is a continuous decline in the stock market, then in such a situation fear sets in the minds of investors. But this is the best time for investment. You can buy more units of the fund at this time at the normal investment amount. Therefore, it is not right to withdraw money from SIP due to fear of market decline.
4. Completion of SIP period
Most of the investments in Mutual Fund SIP are for 3, 5 and 7 years only. Investment period also depends on individual needs. After the completion of the investment period, very few people think of increasing it. Because they have invested so much time for some purpose. Like child's education, marriage etc.