5 Mistakes to Avoid While Investing in SIPs

Published : 11 August 2023

By : Sachin Gupta

Here are 5 common mistakes to avoid while undertaking SIP investment. 

1. Not starting early

Not starting early. The earlier you start, the better compounding returns you get. 

2. Not researching. 

Not researching. It is important to know various factors such as loads, fees, fund performance, peer comparison, etc. 

3. Not using step-up SIPs

Not using step-up SIPs. Adopt the practice to increase the SIP amount every year by 5%-10% based on your preferences. 

4. Selling based on short-term market fluctuations

Selling based on short-term market fluctuations. SIPs are a long-term instrument to build wealth. Do not consider market noise. Focus on your long-term goals. 

5. Ignoring diversification

Ignoring diversification. If you have already invested in individual large-cap stocks, having a large-cap fund SIP will yield no additional benefits.