The investment market is an unpredictable place with a lot of mood swings; you really can’t tell what it’s going to be like the next day. This characteristic of the market always tends to keep most of the investors on their toes but not those investors who have put their bet on the SIP route. Given the features of SIP schemes, investors enjoy freedom from timing the market and tend to focus more on improving their scope of earnings even in the bad times.Although investors may feel pressurised to decrease their SIPs at such times, they should rather consider increasing them.
Reasons to increase SIPs
SIP is a convenient form of investment and allows investors the flexibility to manipulate their investment and to begin with minimum means. Restricting one’s investment capability solely because the current market is ‘bad’ isn’t very conducive for the investors and their growth prospects. If your income has undergone significant hike you may decide to increase your SIP as well and enjoy its various features as and when the situation at hand permits.
The following points out why you should increase your SIP during the bad market phases:
- Widen your scope of earning:Regular investment helps investors to tide over bad phases easily while ensuring a steady flow of income at the same time. When even the earnings are slow, increasing your SIP input during such times will help you to widen your scope of earning more.
- Add more units to your collection:Bad market phases are just investment opportunities in disguise. Use the down phase to its best potential, increase your SIPs and get your hands on more units at cheaper prices. You can also make some great profit by selling off units from your collection at a higher price when the market shows signs of improvement.
- More Profit less Cost per Unit:Adding more to your SIP will not only help you get more units but will also help you earn more over the long run by lowering your average cost per unit and increasing your overall profit.
- Compounding Benefit:Instead of focusing more on the phases of the market, investors should shift their focus towards generating more income in the long run. Investors should consider increasing their SIPs and enjoy the compounding effect on their investment without being too bothered about the market.
- Remember the Sole Objective:Investors can freely increase their SIPs without harbouring much doubt about the market performance. They may base their trust on their ultimate objective, which is to achieve their long term financial goals and also on the fact that the market doesn’t lay low for a long time.
If you still cannot decide if you should increase your SIP in a problematic market or decrease them on a whole, feel free to get in touch with our team of proficient financial advisors and seek answers to your SIP and investment-related doubts.Follow Us: