Connect with us


10 Mistakes You Must Avoid While Calculating SIP

SIP (Systematic Investment Plans) is an effective tool that can turn small amounts of money into a big amount after a certain period of time. By investing regularly, the investors are creating effective means of generating an alternative option of income. In such a scenario, the SIP investments have emerged as one of the most successful options that allow the investors to create substantial wealth irrespective of their current financial standing.

While a lot of us are aware of SIP schemes and its benefits in our lives, most of us tend to make major mistakes when it comes to investing money and maintaining the same. Many websites like make this process hassle-free with their SIP calculators. However, there are certain factors that you keep in mind nevertheless. Here are some of the common SIP mistakes that you must avoid:

  1. Investing Higher Amounts: The fundamental characteristic that distinguishes SIP from other modes of investment is that you need to deposit small amounts for a considerable period of time. However, if you are committing to invest a huge amount every month and then, if you fail to continue the same for some months due to lack of savings, then you might lose the avenue of investment for the particular months.
  1. Waiting for the Right Market Conditions: Several investors wait for the right market conditions to come up while investing. The trick to wait for the market conditions to turn out favorable can work only if the investors believe that the market is overvalued. However, one must realize that it is extremely difficult to correct the market conditions.
  1. Not Going with the Bearish Markets: Instead of following this investment trend, the investors should try to stay invested in the rising markets and should invest in the lower markets. The investors who are investing with the help of SIPs tend to redeem the SIPs during the falling markets. However, it can be a big mistake.
  1. Choosing Dividend Over Growth: As an investor during the time of choosing the particular fund for investing, you should have two options: dividend or growth. In the growth option, no dividend is paid or declared. Thus, the corpus continues to grow and benefit from the compounding.

10 Mistakes You Must Avoid While Calculating SIP

  1. Not Boosting the SIPs: Several investors are not aware of the fact that they can add lump sums to the same fund in the same account or portfolio even while investing a lump sum amount. Adding some amount of lump sum tends to boost the SIP. This would be beneficial in the long run.
  1. Looking for Profits in Fund with Good Returns: The greed to book profits only on the funds that generate good returns can be a major mistake. By confirming profits in the funds that have yielded high returns, you are giving up your future returns. Therefore, it is vital for the investors to recognize the funds in their respective portfolio that might not be performing well.
  1. Ignoring the Impact of Taxes: If you fail to disclose the income in your tax returns and pay the required tax, then the results could be detrimental. Therefore, you must ask the financial experts for preparing a capital gains tax statementfor your investment.
  1. Investing Without Proper Financial Plan: Majority of the investors do not have any financial plan –formal or informal. As a result, they might end up in making wrong financial priorities. Therefore, proper financial planning is essential for identifying and helping you in meeting the short-term as well as long-term objectives. 
  1. Not Monitoring the Portfolio Performance: Several investors take no interest in their own investment. It should be the responsibility of your financial advisor to review the portfolio at a regular frequency.
  1. Monitoring Portfolio Performance Daily: While not monitoring the portfolio performance at all could be a major mistake, doing it daily is also harmful. The equity markets are highly volatile. You should have a long-term horizon with your investment portfolio. Therefore, opt for only periodic performance monitoring of your portfolio.

Continue Reading

Recent Posts

General3 days ago

7 tips on how to organize a budget-friendly move

If you are planning a move any time soon, you might be worried about all the expenses that wait for...

Metal Roof Colors Metal Roof Colors
Home Improvement6 days ago

Metal Roof Colors: How to Select the Best Color for a New Roof

Choosing the right type of material for your roof is enough of a hassle already that the question of choosing...

Health1 week ago

Simple Ways To Feel More Confident At The Gym

If you are new to the gym, or you haven’t been in a while, sometimes you might not feel completely...

Business2 weeks ago

Can You Use Residential Property for Commercial Use

Having extra income, constantly flowing in can make all the difference in the current economy. Getting creative with how you...

What Do Business Consultants Do What Do Business Consultants Do
Business3 weeks ago

Running a Business? How to Minimize Supply Chain Issues

Supply chain issues have always been an issue for businesses but over the last few years, the effect and widespread...

Home Improvement1 month ago

How to Increase Your House Value Before Selling

Increasing home value is the first step to making your place more attractive for future buyers. Whether you are trying...

General1 month ago

Why Calorie Control Is Still The Best Way To Diet

There are a great deal of different options when it comes to dieting, every day there seems to be a...

The Benefits Of Trade Credit Insurance For Your Business The Benefits Of Trade Credit Insurance For Your Business
Business1 month ago

The Benefits Of Trade Credit Insurance For Your Business

Trade credit insurance provides cover for businesses who trade on a credit basis. If the people who owe money for...

5 Charming Restaurant Decor Ideas In 2022 5 Charming Restaurant Decor Ideas In 2022
Miscellaneous2 months ago

5 Charming Restaurant Decor Ideas In 2022

Making your restaurant memorable and stand out is a feat worthy of praise. The sheer pressure of wanting to succeed...

Bank Won't Fund Your Business? 4 Loan Alternatives To Get You Started Bank Won't Fund Your Business? 4 Loan Alternatives To Get You Started
Business2 months ago

Bank Won’t Fund Your Business? 4 Loan Alternatives To Get You Started

Businesses typically require some sort of collateral or proof of concept before funding their business venture. However, it is possible...

Planning A Stag Do Planning A Stag Do
Miscellaneous2 months ago

Planning A Stag Do

If you’re a Best Man then you’re in a unique position of responsibility, and before the day itself when you’ll...

Tips to Reduce Eczema Flare-Ups Tips to Reduce Eczema Flare-Ups
Health3 months ago

What Triggers Eczema | Tips to Reduce Eczema Flare-Ups

Eczema is a skin condition that can induce redness, itchiness, and skin inflammation. Its root cause is not fully understood,...

Women's Fashion Trends To Expect In 2022 Women's Fashion Trends To Expect In 2022
Lifestyle3 months ago

Women’s Fashion Trends To Expect In 2022

A new year means new fashion trends. We cannot wait for what is in store in 2022. It seems that...

Home Makeover Trends: Insights from The Pros Home Makeover Trends: Insights from The Pros
Home Improvement4 months ago

Home Makeover Trends: Insights from The Pros

Are you considering a home makeover but don’t know where to start? You’re in luck! In this article, we will...

Interior Design Trends 2022 Interior Design Trends 2022
Home Improvement4 months ago

Interior Design Trends 2022

We all spend time pining over other people’s interior’s on Pinterest or Instagram, but with these trends, it’s easy to...