What do you learn about mutual funds and SIP

Lessons learned from the trend of retail investors exiting SIP and investment accounts due to market downturns.

 

SIP learn

What do you SIP learn more about mutual funds?

SIP Lessons learned from the trend of retail investors exiting SIP investment accounts due to the market downturn.

 

Amidst the various impacts caused by the volatile trend in the stock market, the increase in the closure of SIP accounts has caused concern among experts.

 

A regular investment plan, also known as SIP, is suitable for investing in mutual fund schemes. Investors can choose a suitable fund and invest a certain amount continuously at a specified interval. This method is believed to help in getting benefits especially by investing in equity funds. 

SIP New Accounts

As awareness regarding mutual fund investment is increasing, the trend of investing through SIP has been increasing in recent years. Many retail investors are seeking SIP investment. The upward trend of the stock market has also contributed to this.

However, due to the current volatile trend of the market, it has been seen that many retail investors are exiting SIP accounts. The decline in recent months has increased this trend.

For the first time in January, the number of closed accounts exceeded the number of newly opened SIP accounts. During this period, 6.1 million accounts were closed while 5.6 million accounts were opened.

It has also been revealed that the net accounts have continued to decline for the sixth consecutive month. However, the total SIP investment in January was 26,400 crores. If the market correction continues, it is expected that SIP investment may be further affected. 

Continuous Investment SIP

With regard to SIP investment, it is considered ideal to invest continuously without worrying about the fluctuations of the market. Experts emphasize that this will give good results in the long term. Features such as the ability to buy more units during market downturns and reap benefits are also often pointed out.

Although it is natural to feel afraid when the market declines, many people say that leaving their SIP account is a worrying aspect in the experience of facing such a decline. Investors who continue investing when there is profit are considered to feel bad when there is loss and exit.

At the same time, a section of the mutual fund industry believes that the closure of SIP accounts is not a big concern. They say that SIP accounts may have been opened for a specific period and then withdrawn.

They say that SIPs should be understood as a way to continue investing smoothly despite temporary problems. They also believe that there is a need to create more awareness about the need to continue investing while keeping market trends, risk factors, and goals in mind.