1. Generally, MF SIPs are activated to:-
a) invest fixed amounts periodically from surplus income,
b) link them to identified financial goals through a portfolio,
c) take away emotions from equity investing,
d) avoid “missing the bus” or “catching the tide” in stocks,
e) avail benefits of long-term rupee cost averaging, and
f) devote optimum time and energy in career enhancement activities.
2. Generic reasons for stopping SIPs of good mutual funds are for :-
a) Fear of losses - if so, shift to fixed income products.
b) Profit-booking - if so, rebalance portfolio to original debt-equity ratio.
c) Meeting an emergency - if so, keep a contingency amount in a liquid or ultrashort term fund, or withdraw only as required.
d) Goal amount reached - if so, fulfil the goal immediately.
e) "Playing" market cycles - if so, earmark a suitable fixed amount separately to meet that urge.
f) Paucity of savings - if so, reduce SIP amount instead of stopping altogether.
g) Indecision - if so, revisit all above reasons again, instead of weakening compounding power of a good SIP investment.
3. We can avoid reaching the stage of having to stop good MF SIPs later by:-
a) Having an asset allocation strategy for our investable amount,
b) Including funds matching our risk profile and appetite,
c) Ignoring non-diversified funds,
d) Avoiding duplication of funds in the same category, and
e) Consolidating our fund portfolio periodically.
a) invest fixed amounts periodically from surplus income,
b) link them to identified financial goals through a portfolio,
c) take away emotions from equity investing,
d) avoid “missing the bus” or “catching the tide” in stocks,
e) avail benefits of long-term rupee cost averaging, and
f) devote optimum time and energy in career enhancement activities.
2. Generic reasons for stopping SIPs of good mutual funds are for :-
a) Fear of losses - if so, shift to fixed income products.
b) Profit-booking - if so, rebalance portfolio to original debt-equity ratio.
c) Meeting an emergency - if so, keep a contingency amount in a liquid or ultrashort term fund, or withdraw only as required.
d) Goal amount reached - if so, fulfil the goal immediately.
e) "Playing" market cycles - if so, earmark a suitable fixed amount separately to meet that urge.
f) Paucity of savings - if so, reduce SIP amount instead of stopping altogether.
g) Indecision - if so, revisit all above reasons again, instead of weakening compounding power of a good SIP investment.
3. We can avoid reaching the stage of having to stop good MF SIPs later by:-
a) Having an asset allocation strategy for our investable amount,
b) Including funds matching our risk profile and appetite,
c) Ignoring non-diversified funds,
d) Avoiding duplication of funds in the same category, and
e) Consolidating our fund portfolio periodically.