Market Downturn Erodes SIP Returns. Systematic Investment Plans targeting equity mutual funds have entered negative territory across one and two-year investment horizons, marking a significant shift for investors who commenced their SIP journey after 2020. The recent market sell-off has intensified this trend, creating challenging conditions for those relying on rupee cost averaging benefits. Financial analysts attribute this downturn to multiple factors including global economic uncertainties, inflation concerns, and shifting monetary policies. However, experts universally recommend that investors maintain discipline during volatile periods rather than pause their contributions. Continuing SIPs during market downturns actually presents an opportunity to accumulate more units at lower prices, thereby reducing the average cost per unit over time.
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