With markets going downwards should one continue with SIPs in mutual funds or stop them?

Question

With the Sensex expected to continue its downwards trend below 14K...should one still continue with the SIPs? Or should we stop the SIPs and wait for the market to stablilize and then commence SIPs again?

Also, it seems most of the value generated through the SIPs/ mutual funds generated in the last year has almost been washed out... and we are back to the last year levels...

Should one still continue to remain invested or withdraw the amount from the funds and invest again at the lower levels?

Please advise.

Answer 1

This is the correct time to invest. Continue with your SIP. Now

you will get more units than what you received when the market was at the higher levels. Markets will definitely improve in the long term. Downward trend is not going to last for ever. It has been proved world over that Mutual funds can give you return between 12% to 20% in the long run, (say five years). Never withdraw at these levels. Withdraw only at higher levels and invest at lower levels.

Answer 2

SIP is good in UP mkt

in down mkt in is better to do FD and invest at once at BOTTOM

get top and bottom on this link

Answer 3

Hey,

I wud say donald is 100% correct..

To put his response in a direct way to ur question, Just stop the SIP and watch the market utill u feel the bear is over, then invest ur money u have targeted for this year..

Ur SIP may not get u the high no of units for the nxt month(assuming the markets are back to form!!).So invest ur money this time now!!, Like ppl have already told you, dont sell any now..

-Mahesh

Answer 4

SIP investment in mutual fund is very best for volite market . pls continue it to get cheaper unit in falling market

Answer 5

With such falling markets, investing in SIPs is the right strategy as every time you get to purchase funds at a lower price.

Answer 6

Its true that its hard to see your gains of the past year getting washed away. And over the past 4-5 years from 2003 on, as stock/MF investors in India, we have sort of got used to easy returns. The market will be testing our nerves in the short term. Those who remain invested in the best stocks/MF products will gain by retaining their confidence and staying invested. You can look at it, this way, to put things in a proper perspective

1. Certainly, this is not the time to sell out and withdraw; you will only be cutting yourself short.

2. If your MF choices are good, and are among the 5-star rated reputed funds that have a long term record of low risk high returns, you must stick it out. Check out Top Rated Funds at

http://www.valueresearchonline.com/topra...

3. Infact, if you have confidence in the funds of being in the top performing funds, this is the time to do a 5x or 10x your monthly SIPs. That will average down the costs significantly, and when the market recovers eventually, you will get the benefits of returns acceleration. Think of it like this, are you happy or sad if your favourite product becomes available at bargain prices, afterall you are getting it cheaper & cheaper; Caveat is, your MF choice must be in the top quartile of funds.

4. The last bit is about the futility of trying to time the market. Gurus have always said, what matters is Time in the market rather than trying to time the market! Ah! if only I could have sold out in Dec-Jan and invested back now:-). Even the best money managers, with teams of analysts backing them, cant do it most of the time and are caught unawares; so heed the Gurus, and do the next best thing, stay invested. And like someone else said in another answer, this is not the time to sell out!

Answer 7

I presume that you are a seasone investor.

Continue with your SIP investments. So that the average cost of investing will come down. Do not worry too much about the current market volatility. Since the value of almost every investments are down by around 40% it is not advisable to redeem your investments at this point.

The markets are expected to recover to certain levels in another 3-4 months, if not fully.

Till then

keep your patience

Have a nice day !!!