There are a good number of people who have a SIP(Systematic Investment Plan). SIP diversifies your investments and offers you good returns. People chose SIPs as they are a good long-term investment goal. However, some people consider leaving it rather soon. This isn’t advisable, warn experts. The longer you keep investing in SIP the more interest you will earn. The power of compounding works in the long term period, similar to how each drop of water has the potential to create an ocean of water. India’s First Free Online Financial Advisory Moneymindz
Before deciding to take any decision on your SIP, check the following factors:-
1. Performance of the mutual fund
Equity Mutual Funds are long-term investment products and that means you can’t judge the performance if just a single year and pull out. Keep track of your funds performance and keep track of the competing fund’s performances too. In case your fund underperforms for two years and another fund does, well, terminate your SIP and go for i5t. But if your fund is doing well and suddenly dips in performance, don’t panic and sell the fund as you might lose potential returns.
2. Financial goals
Before investing, having a financial goal is imperative and most investors seem to have financial goals set in mind while investing. So people start SIP with certain financial goals in mind. Those financial goals can change as time passes by and as circumstances change. While taking any decision pertaining to investment, never forget your financial goals. India’s First Free On call Financial Advisory Moneymindz
Mutual Fund companies are businesses and are prone to changes in the organizational structure and policies. So if you aren’t comfortable with the new changes, you are free to terminate the investment without any obligations. If your fund manager has changed and you don’t like his/her strategies, etc. you can terminate your SIP. But always check and confirm everything. You may or may not like the way the fund manager invests, but he/she may have a strategy that is better than what was used until then. Be sure to verify before quitting.
If your investment objective doesn’t match the fund managers’ investment objective, it’s time to change. For instance, you might invest keeping something in mind and that may be totally different from what the fund manager is investing for. What if you are saving for retirement but the fund manager is aiming for something else?
These are just some aspects you ought to check before taking decisions like quitting the SIP. You can always visit www.moneymnindz.com or give a missed call to 022-62116588