Don’t Stop Your Mutual Fund’s SIP When the Market Falls

SIP is an easy way of investing in a mutual fund. This gives long-term returns to the investors.

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Investors should not stop mutual fund's SIP even when the share market falls as it can profit the investor in the long term.

Systematic Investment Plan (SIP) is an easy way of investing in a mutual fund. This gives investors the benefit of the market in long-term returns.

Many investors close their mutual fund's SIP after the share market falls, but small investors don't have to follow it.

Increase SIP When Market Falls

Whenever's there a dip in the market, new investors get scared. They get confused about whether they should stop their SIP.

They should realise that stopping SIP could result in a permanent loss in the future.

When the market falls, the investor will get more units at the cost of their old SIP investment. Once the market rises, the returns will increase, making the unit cheaper and increasing the investor's returns.

The investor should invest in both equity and liquid mutual funds, so whenever there is a fall of more that 5 percent, some amount of money can be transferred from liquid mutual funds to the equity mutual funds.

Through this, one can buy more units in less Net Asset Value (NAV), lowering the cost of one's investment.

Retail investors, who invest Rs 1000 to Rs 5000 per month, should never close their SIP because the way market falls, it rises too. The combination of long-term investment and SIP is always profitable.