Ask Leo - Should We Bother of Our Negative SIP Value ? Stay Focussed to Goals.
Over the ages, I have noticed that the SIP mode of investment has become one of the easiest way of wealth creation. Not much risk involved with regard to lump sum amount. The investor keep on investing on their choice of fund every month and in return gets specified unit for each purchases on a specified date. The biggest advantages of SIP that the investor does not need to time the market.
I did invested some amount on one of the long term SIP mutual fund scheme and after giving me some green indication in the initial days, it turn Red. After staying invested for over 15 months, currently the value is much lessor. Infact there is no return as of now and seems my investment is spoiled. It does presses the panic button inside me.
But then I realised that I made this investment for the long term purpose, and looking at current market price, I don't need to bother much. When I analyzed last 5 years performance of the same scheme, it gave a handsome return of 15% which is much more than expected. As the SIP mode of investment doesn't need to time the market. I don't need to press the panic button so early.
The fluctuation in market might give a goose bumps with regard to the reduced investment value , however there is no worry as at lower NAV price the Investor would get me more unit. The more units I have the better it is at time of redemption. The NAV decides the current worth of the investment.
After being into the SIP portfolio since many years, I must say that every SIP investment should be done with a long term and investor must set a goal to achieve. The investor must remain focused on the goal than getting worried of thr portfolio value.
The goals may be varied differently from individual to individual. Some may opt to start SIP for own usage like buying a house, or marriage or travel. On the other hand the goal may be of seeing your amount get doubled in fixed time. As said every investor have their own choices and sets their goals accordingly.
This is why it is important that every SIP investment should be goal oriented and we focus on its accomplishment rather than keeping a track in short time and adding woes by pressing the panic button.
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