As per the report published on 11th Dec 2024 on money control says that SIP stoppage ratio is increasing. Highest SIP stoppage ratio was 80.69% on May-2020. This ratio Crossed by 88.38% in May-2024. Last month also Nov-2024 SIP stoppage ratio around 79.11%.
That means lots of people discontinue investing in mutual funds. But do you know the main reason for this increased SIP stoppage ratio?
Main reason is the psychology and behavioral pattern of many Investors to the money. When everyone sees the money grows they invest more and when they see money is not growing they stop investing. Usually from the 27th Sep 2024 Indian Stock Market is consolidating on a higher time frame and most of mutual funds NAV is also not increased or less increased from previous years. So as per the investors psychology they have stopped their Investments or SIP.
According to another research there are mostly stoppage SIP in a direct plan not in a regular plan. In a direct plan investors have a choice to start whenever and stop as they feel. And in a regular plan investors invest through any expert or agent guidance.
Here is the main role of Financial Advisors: they help you in this kind of situation when you feel you need to exit or Stop SIP they guide you not to do. Because Mutual Funds are long term investments instruments. It’s not a stock market trading kind of investment instrument.
When you find this type of value added guidance and suggestions you get the value in the long term. So always have a Financial Advisor who will always guide you to doing the right way to investing.
Money Control Article : https://shorturl.at/NVqEh