You heard it from everywhere; hoardings, newspapers, radio, internet everyone chorused #MutualFundSahiHai. All of last year and even now, there is advice from various corners to invest in Mutual Funds. Falling interest rates pushed you further. So, you took the plunge and started Systematic Investment Plan last year.

Contrary to what you thought, investing in Mutual Funds would have turned out easy. An auto debit every month from your account and voila! Investment is done. An SMS informs you of account debit, a statement tells you about amount added to your folio & NAVs assigned and whenever you want to see what’s your investment’s worth, you simply log on to an app.

• So far so good. But as a new investor what are you supposed to do now?

  The right answer would be: Forget about it.
  
  No, there’s no question of kidding you. In all seriousness, you should forget about the SIP you’ve started for a good 8 to 10 years atleast. Equity Investments require patience and time to generate returns. To illustrate, if you’ve invested to accumulate around 20 lacs at the end of your SIP, you need to give 9 years to your SIP of Rs. 10,000 to come close to your target (Rs. 19.5 lacs), assuming a 12% annual return.

• Are you worried that you can hardly see any impressive returns on your SIP? It is sometimes worse than fixed deposit rates.

  Right, that would happen. If it’s only been a year into SIP and you are expecting gains like 10%, it’s a far shot. Give it time and you won’t be disappointed. Don’t track it on an everyday basis.

• You hear some of your colleagues talk about exiting the markets to cut losses. Should you discontinue the SIPs?

  Again No. You haven’t directly invested in the stock market so frequent buying and selling is simply not relevant. The Fund manager and his team is already doing an extensive research and managing your money. Plus, you shouldn’t be bothered about markets going up and down. Every month you invest at different market levels and your NAV gets averaged out over long term. It is actually best of both worlds – not having to decide when to invest nor getting affected by rise or fall in the stock market.

• It seems like a decent option to you but still doubting if you have gone overboard with 3 SIPs?

  Overboard with 3? Not a chance! In fact, the best way to invest via SIPs is to have clear goals of what you are going to achieve with each SIP. Accordingly, you can set the amount and duration of the SIP. If you are falling short in meeting your target, try and increase the amount with salary increments. If you have 5 major goals, consider starting 2 more in due course of time. But remember not to add many funds to your portfolio. Multiple SIPs in maximum 4-5 different category funds are enough to cover all your investments needs. So choose your funds wisely!

Before you let any more confusion cloud you, try using a free Portfolio Manager tool available online easily, to see what modest SIP can fetch if you hold on. Bet you will be sold!

Past performance may or may not be sustained in future.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.