NAVIGATE THE CHOPPY MARKETS THROUGH A SIP

• HDFC securities
• 29 Apr 2017
• Systematic investment plan SIP

Don’t let the recent volatility in the stock market affect your equity investments. Here are some guidelines to remember and follow when investing in mutual funds and stocks during market turbulence.

 

First and foremost, you should invest in stocks and mutual funds with a long-term goal of at least 5 years or more. Although you can reap benefits in shorter spans as well, the longer you invest the higher your returns will be. Investors who discontinued their SIPs in the past 2 years would definitely feel the pinch as they missed an opportunity to gain from the last rally.

 

Secondly, you should adopt a disciplined approach such as a SIP especially since the equity markets have been volatile. A systematic investment will save you the effort of timing the market. SIP also ensures that you will buy the stocks/MF units at high prices as well as low prices, thereby lowering the average purchase price of the investment.

 

Lastly, equity-backed investments beat inflation on a long-term basis. Experts are of the opinion that not doing so will lead to poverty in your golden years.