SIP: The boons of the downtrend market

The investment market is a volatile zone, one can’t really pinpoint when the market is going to soar up or fall down. Even the slightest movement in the market affects the earnings of the investors and therefore they are prone to discontinue their investments in a downtrend market. It is lack of farsightedness and fear of losing money causes the investors to draw out from the market which causes them in terms of lost opportunities and missed earnings. Amidst all this chaos, it is the disciplined SIP investors who emerge as winners in the downtrend market.

How downtrend of the market helps the SIP investors?

Though the volatile nature of the equity market is unpredictable and risky, it is worth the risk to continue the regular habit of investing in SIPs. Let us take a look at how exactly the downtrend market helps a SIP investor:

  • The most full proof way of tackling the tides of a downtrend market is to stay put in the situation. Regular and systematic investment ensures that the SIP investors make the most of the market in every situation and enjoy benefits in terms of earnings.
  • The downtrend market comes with an opportunity for the SIP investors to add more to their collection of units at minimum cost. The downtrend market allows them to purchase at a price lower than usual which ultimately increases their chances of earning more in a thriving market when they choose to sell the same units at a higher price.
  • It is true that equity market faces periods of lows but at the same time, the returns earned tend to follow a nominal growth rate of GDP over the long-term. This comes off as a benefit for those investors who have put their money in long-term SIPs.
  • Investors shouldn’t be too quick to judge the fruitfulness of an investment plan on the basis of its performance and returns in the immediate market. A plan that is struggling at the beginning of the down phase can show exemplary performance in the next 3-5 years and earn returns more than many other schemes.
  • SIP investors understand the importance of years when it comes to wealth creation through compounding effect.  The disciplined habit of investing regularly, irrespective of the phase of the market, allows them to enjoy a steady flow of earnings and helps in generating wealth.
  • The equity market doesn’t always lay low; a systematic investment habit offers the investors with exciting investment opportunities to meet their financial goals successfully even at times when the market is struggling. Moreover, it also helps the investors to strengthen their corpus for a better tomorrow.

Investing in a SIP and continuing that investment even in downtrend market enables a person to meet their financial goals and to plan their life afterretirement better. Seek the assistance of financial experts to learn in depth about the investment tricks which will help you brave the downtrend of the market confidently.

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Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Past performance is not an indicator of future returns. Wealth Redefine is a AMFI registered Mutual Fund distributor – ARN - 167127

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