Ask Value Research

Should I discontinue my SIP?

We don't advocate investment decisions on the basis of short-term trends in the market

I have started an SIP of ₹500 per month in Reliance Tax Saver. The fund seems to be perform badly now. I have paid three installments. Should I continue the SIP?
- Krishnamoorthy S

You should continue investing in Reliance Tax Saver. It is a 4-star fund that has performed reasonably well.

You shouldn't make your investment decisions based on the short-term performance of your fund. Tax saving funds come with a three-year mandatory lock-in period, but we generally advise our readers to invest in equity schemes only if they have at least five-year investment horizon. This is because equity can be extremely volatile in the short-term, but it has the potential to offer higher returns over a long period.

Also see: Have SIPs Failed?

This article was originally published on September 09, 2015.

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