SIP Investment Tips: A large number of retail investors are making money in Mutual Funds through Systematic Investment Plan. If you are thinking of investing in SIP, then first get complete information about it. Because due to lack of information, many investors make some mistakes and have to suffer loss instead of profit. Today we will be telling you about 5 such mistakes that investors often make while investing money through SIPs.


Non-clarity of financial goals



  • If you are investing in mutual funds then your financial goals should be clear.

  • If your financial goals are not clear then you may choose the wrong fund.


Choosing a dividend plan instead of growth



  • It is not right to give preference to dividend plan instead of growth plan.

  • Investors who do this think that when the mutual fund declares dividend, they will earn big money.

  • Most investors are not aware that mutual funds pay dividends from their assets under management. This reduces the paid dividend from nav. At the same time, dividend is calculated on the face value of the fund and not on the basis of NAV.

  • Also keep in mind that investors in growth plans also get more benefits in terms of tax exemption.


Don't make this mistake when the market is coming down



  • Many investors stop the SIP when the market goes down and start investing when the market goes up.

  • But doing so is wrong and it is completely contrary to the basic principles of investing buy low and sell high. You can avoid this mistake by continuing to invest even during the falling market.

  • Ignore the market movements, invest in the category of funds matching with the investment tenure. This way, you can choose the right fund.


Don't make frequent changes



  • Don’t constantly adjust your portfolio.

  • Do not buy and sell shares seen by others. This can be harmful because everyone's financial goals and conditions are different.

  • Many people invest based on the previous performance of the fund but this is not entirely correct. Always keep in mind that the returns of the fund keep on changing.

  • The value of the fund changes every quarter. You should also refer to other standards before choosing funds.


Don't consider low NAV as cheap ergonous fund



  • Low NAV (net asset value) should not be taken as a cheap fund.

  • There can be many reasons why the NAV of the fund is high or low.

  • Investors shouldn't give too much emphasis on NAV ,when investing in mutual funds through SIP.

  • Investors should look at the past performances of the fund. The focus, at the same time, should be on his future plans.


Disclaimer:


(Here ABP News is not advising to invest in any fund. The information given here is intended to be informed only. Mutual funds are subject to investment market risk, read all plan documents carefully. The NAV of the schemes may go up and down based on factors and strengths affecting the security market, including fluctuations in interest rates. The prior performance of a mutual fund may not necessarily be indicative of the future performance of the plans. Mutual funds do not guarantee or assure any dividend under any schemes and are subject to availability and adequacy of distributable surplus. Investors are requested to carefully review the Prospectus and obtain expert professional advice on the financial implications of specific legal, tax and investment/participation in the scheme.)