5 Mistakes to Avoid While Investing in SIPs

Published : 11 August 2023 By : Sachin Gupta

Systematic Investment Plans are a great way to grow wealth and earn compounding returns.

[{"selector":"#anim-bac90f20-1336-48f3-9e5d-aec32e293666","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-a8f35826-0678-43b5-bfca-1e4c33038cd3","keyframes":{"transform":["translate3d(0px, 106.10501%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-e65620e4-ee7b-493c-864d-938455c67068","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-c863bbad-2a3e-47bb-9c84-05d2609072f5","keyframes":{"transform":["translate3d(0px, 295.10361%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Best SIP 2023

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

[{"selector":"#anim-e0ca4079-c852-499c-8892-038d5dd0fecc","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-e4f6d630-0d68-46b7-8685-76de5be7a2f5","keyframes":{"transform":["translate3d(0px, 116.09331%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-6af0a355-9902-4d20-927e-73f1f824add2","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-d2d52470-e348-4f3f-924f-7912e9b6dafe","keyframes":{"transform":["translate3d(0px, 256.12053%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}]

1. Not starting early

[{"selector":"#anim-af2a894d-3c1d-4273-ad6e-5f1db9481645","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-1395b467-aeab-47d9-a9a0-f456e5ff6d67","keyframes":{"transform":["translate3d(0px, 111.63257%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-6d6e6224-28ce-4eae-9906-279458f09050","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-cf5e7aa1-8d3d-4e56-9f20-e594db103571","keyframes":{"transform":["translate3d(0px, 974.07388%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-f7b5aebe-ce53-46f7-b5d3-efc23894014c","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-95cb2c7d-401c-4a00-b11f-7be55278f61e","keyframes":{"transform":["translate3d(0px, 329.73842%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Not starting early. The earlier you start, the better compounding returns you get.

2. Not researching.

[{"selector":"#anim-56a2efa5-0999-4234-9f6c-55df636954d1","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-f4b107fd-0eb3-4c84-b60b-6c43ce3c3542","keyframes":{"transform":["translate3d(0px, 111.63257%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-71c7223b-0aaf-4544-aa22-e2fedb470e4d","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-32dc1843-6bfd-4b7c-91c1-03f1197ee9be","keyframes":{"transform":["translate3d(0px, 974.07388%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-4069a08a-4697-4188-9388-13bfb348a75e","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-3de3a633-4af9-40e6-a97d-d6ae75fff8ff","keyframes":{"transform":["translate3d(0px, 269.13578%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Not researching. It is important to know various factors such as loads, fees, fund performance, peer comparison, etc.

3. Not using step-up SIPs

[{"selector":"#anim-85b637ed-9cc9-475d-b3d0-3274589bda07","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-06a56164-7a89-4101-881f-02f5c61950a0","keyframes":{"transform":["translate3d(0px, 111.63257%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-02442368-54ed-4723-aec6-f3e6b5ecc4ea","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-967b7011-0736-47f8-ac0a-d8bd5c56397e","keyframes":{"transform":["translate3d(0px, 974.07388%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-6a011214-3b09-44d6-86f3-f42ee0dd106b","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-d4b8f6b1-c8cd-4459-a323-15c90e7e0db9","keyframes":{"transform":["translate3d(0px, 269.13578%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] 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

[{"selector":"#anim-b7a00740-d914-4720-ba75-d3b811f1fbc1","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-bf1fba4f-f9da-4afc-b8a9-ba161606e006","keyframes":{"transform":["translate3d(0px, 111.63257%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-a32f8f2c-4125-4c77-b9c8-fcbd56d1680a","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-dfe67985-6a72-47a2-9603-19658656e684","keyframes":{"transform":["translate3d(0px, 487.03694%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-40ed6eb2-a17f-485d-ab2f-a732f98ec47a","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-1b5930c5-61cd-438a-8d68-013fa1450d52","keyframes":{"transform":["translate3d(0px, 177.18782%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] 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

[{"selector":"#anim-a048e4b9-3885-4341-9c05-877926f68ce8","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-1a26038e-b06f-4324-9174-7d0d5da9378b","keyframes":{"transform":["translate3d(0px, 111.63257%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-ab715ab2-aa08-4ef2-9d47-d7b02e6b2f04","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-69257ac4-99ba-464f-85c8-48b589463050","keyframes":{"transform":["translate3d(0px, 974.07388%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-1d995b1d-9f85-45ac-8d2a-c26023e89b1c","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-1b991f7e-2b20-42de-8012-d4895222c832","keyframes":{"transform":["translate3d(0px, 255.80244%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Ignoring diversification. If you have already invested in individual large-cap stocks, having a large-cap fund SIP will yield no additional benefits.

Swipe up

[{"selector":"#anim-7346cbb8-262a-4fbf-b07e-c841107c2489","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-91018747-1083-441d-9a99-81ddcddbbc96","keyframes":{"transform":["translate3d(0px, 403.05570%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-552b960f-7c26-4a8c-985e-96fe4b90550a [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Check out more 5paisa webstories More Webstories