Keeping your SIPs going

Prashant (32) works in the legal department of a telecommunications company. He is married and has a one-year-old son. So far, he has been mainly saving through traditional products - bank fixed deposits, recurring deposits and the Public Provident Fund (PPF). However, just about six months back, he started a Systematic Investment Plan (SIP) of Rs 5,000 in a multi-cap fund to save up for his retirement on the advice of a friend. But the recent fall in the stock market due to the spread of COVID-19 has made him extremely anxious. Here is what he should do. Do not stop your SIP Prashant should not stop his SIPs. This is actually a good time for SIPs as he can invest when the market is cheaper. Later on, when the markets recover, investments made now will boost his overall returns. Understand that equities are volatile Over short periods, equities can sharply move up or down. However, if observed over a long period, their movement has been linearly upwards

This article was originally published on May 28, 2020.