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Mutual Funds - Discontinuing Your Mutual Fund SIP Now Could be a Mistake

01 Aug 2020

Most investors are worried due to their SIPs giving unexpectedly lower returns. As reported earlier, only a few equity schemes have given double-digit reruns in the last one year. Amfi data on SIP collection shows muted growth in the months of April, May and June. Number of SIPs discontinued is also on a rise. But stopping your SIPs at this time could be a mistake. This is the time when your mutual fund SIPs will actually be working harder to stun you with good returns as soon as the broader markets go up.

Kalpen Parekh, President, DSP Mutual Fund, in a tweet said, "When will SIPs work - just when it starts feeling that SIPs don’t work." He adds, "SIP installments in flat to negative trending markets earn the best returns."

How SIP installments in negative markets earn best returns?

This may actually be the worst time to stop your SIPs. The best you can do to your investment portfolio at the moment is to continue with your SIP in mutual funds, provided you are not facing any financial trouble due to job loss or medical emergency created by the ongoing pandemic.

Source: Live Mint BACK

To be added soon

Priyanshu B. Tanna

SEBI registered IFA

ARN119467 & EUIN E-183966

To be added soon

Bharat Tanna

SEBI registered IFA

ARN26176 & EUIN E-044509

To be added soon

Kundan B. Tanna

SEBI registered IFA

ARN294073 & EUIN E-553599

Risk factor

Risk Factors – Investments in Mutual Funds are subject to Market Risks. Read all scheme related documents carefully before investing. Mutual Fund Schemes do not assure or guarantee any returns. Past performances of any Mutual Fund Scheme may or may not be sustained in future. There is no guarantee that the investment objective of any suggested scheme shall be achieved. All existing and prospective investors are advised to check and evaluate the Exit loads and other cost structure (TER) applicable at the time of making the investment before finalizing on any investment decision for Mutual Funds schemes. We deal in Regular Plans only for Mutual Fund Schemes and earn a Trailing Commission on client investments. Disclosure For Commission earnings is made to clients at the time of investments. Option of Direct Plan for every Mutual Fund Scheme is available to investors offering advantage of lower expense ratio. We are not entitled to earn any commission on Direct plans. Hence we do not deal in Direct Plans.

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