How long should one remain invested in an SIP?
How long should one remain invested in an SIP? Is it better to shift to another SIP after receiving around 500 units from the earlier one?
Amit Gulati, Chandigarh
SIP is a facility to invest regularly in a disciplined manner. Given the fluctuations in the market, an SIP enables you to continue investing without seeking to time the market. If you were to take conscious decisions to invest at certain points of time, such decisions can be difficult to implement because of emotional considerations. By investing through SIPs you can put your investments on auto mode. Therefore, there is no need to make a further timing decision in an SIP, wondering about the time to be in it, and the time to shift. Choose from mutual fund schemes that have a good track record, and go for a one-year SIP. At the end of the year, you can review your scheme and continue with the same or shift to another.