I have been investing in Aditya Birla Sun Life Pure Value Fund and HDFC Mid-Cap through SIPs for the last two years. But they are giving negative returns. Besides, I have been investing in an equity diversified fund over the last one year. Even its returns are almost at par. So, should I continue with my SIPs or not?
-Vivek
This is not the appropriate time to stop your SIPs, even though your SIP returns generated over the last one-two years are negative. In fact, investors, who have been investing for the last three years, have not been able to generate reasonable returns.
Around two years back, the market was performing very well and many investors like you got excited and started investing. But your loss is on the lower side, as you have been investing through the SIP route. Had it been a lump-sum investment, the loss could have been more because you could have witnessed a decline of around 20 per cent. This is the benefit of investing through the SIP route. It has the ability to reduce your losses. Since you have been investing through SIPs, the loss wouldn't be that much.
Even in this type of situation, it is important to continue your investments for higher returns in the long term and you have chosen good funds. So, continue with your SIPs. And while investing in equity, always keep a horizon of at least five years and never invest a lump-sum amount. Hopefully, if you increase your view to another three-four years, you will be able to witness decent returns from your investments.
This article was originally published on September 06, 2019.
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