Why your SIP may not be delivering the returns you expect: Mistakes that mutual fund investors should avoid — SkimNews
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- Value Research quantified the cost of pausing an SIP mid-crash: a ₹10,000 monthly SIP that continues as NAV falls from ₹50 to ₹35 over four months accumulates ~941 units, versus just 800 units if the investor waits for recovery — a 141-unit gap worth roughly ₹7,050 at the recovered NAV.
- Harendra Zatakia, a Sebi-registered investment advisor and founder of Wealth Aligned Financial Advisory, said allocation should be based on risk capacity, investment horizon and financial goals, not on what other investors are buying.
- Chasing past returns is flagged as a separate trap: 1-, 2- and 5-year performance figures help gauge a fund but do not guarantee future results, and former market leaders can quickly become laggards.
- Goal-fund mismatch undermines outcomes — an equity SIP earmarked for a child's overseas education in three years should not be treated like a retirement portfolio with a 30–40 year horizon, especially given mid- and small-cap funds' short-term volatility.
- Zatakia's stress test for investors: if your honest answer to 'what would you do if your small- and mid-cap allocation fell 40%?' is 'sell,' the allocation is already too high.
- Rupee-cost averaging only delivers its benefit when investors keep buying through the dip, the Value Research report noted — the cheapest units are accumulated precisely when it feels most uncomfortable to invest.
Why it matters: For the millions of Indian households using SIPs to build long-term wealth, the article's core insight is behavioral: ₹7,050 per ₹40,000 invested is a measurable, avoidable loss tied directly to pausing during downturns, making consistency through volatility the single highest-leverage habit in SIP investing.
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