Producer: Priyanka Das Editor: Nisha Dubey
What are you saving for? Retirement, child’s education, or a down payment on a house? Knowing your goal will help you choose the right SIP plan and investment horizon.
One of the most significant mistakes investors make is jumping into SIPs without conducting adequate research. Before investing, thoroughly research the mutual funds or investment avenues available, considering factors such as past performance, fund manager expertise, expense ratios, and investment objectives.
Each investor has a unique risk tolerance level based on their financial goals, investment horizon, and personal circumstances. Ignoring your risk tolerance and investing in SIPs with high volatility could lead to panic selling during market downturns, jeopardising long-term returns.
Attempting to time the market by starting or stopping SIPs based on short-term market movements can be detrimental. SIPs are designed for long-term wealth creation, and trying to predict market highs and lows often leads to missed opportunities or unnecessary losses.
Concentrating investments in a single asset class or fund exposes investors to higher risks. Diversifying SIP investments across various asset classes, sectors, and fund categories can help mitigate risks and enhance overall portfolio stability.