SIP Myths: 5 misconceptions that can put a brake on your earnings! Are you a victim?

In the world of investing, SIP (Systematic Investment Plan) is considered the easiest and safest method. But did you know that it's also surrounded by many misconceptions? Many investors believe things about SIPs that are either incomplete or completely wrong. If you, too, are a victim of these myths, learn the truth today. Don't let this misconception cause you any harm.

Myth 1: SIPs never cause losses!

Many people believe that SIPs will always yield good returns and will never cause losses. The truth is that the chances of losses from SIPs are very low in the long term, but some funds consistently underperform. The performance of each SIP depends on the quality of the fund and market conditions. Therefore, choose your funds wisely when investing in SIPs.

Myth 2: Stop SIPs when the market is going up
Many investors believe that SIPs should be stopped when the market is going up. But doing so results in two-fold losses. First, you can't buy cheap units during a downturn, and second, you can't profit when the market rises. The true benefits of SIPs are realized only if they are continued uninterrupted until you reach your financial goals.

Myth 3: SIPs are a product in themselves!
Many people think that SIPs and mutual funds are two different things. But the truth is that SIPs are not a product, but a way to invest in mutual funds or equities. You can invest in any fund according to your needs. The real purpose of SIPs is to meet your long-term financial needs in a planned manner.

Myth 4: SIPs are impossible in ELSS!
Many investors believe that SIPs cannot be done in ELSS, or tax-saving mutual funds, because they have a 3-year lock-in period. However, the reality is that SIPs in ELSS are most beneficial because they allow for rupee averaging. Just keep in mind that a 3-year lock-in period applies to each installment.

Myth 5: SIPs are only for the long term!

It is often believed that SIPs are only for long-term investments. This is not true. Debt fund SIPs can be chosen for short-term goals, and equity fund SIPs for long-term goals. However, the real benefits of SIPs are realized only when there is high market volatility, as this is where rupee averaging works.

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