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Should you give a break to your SIPs?

Systematic Investment Plans or SIP is a crucial step in starting one’s diversified investment portfolio. Be it Equity mutual funds, ETFs or even gold, many investors often prefer the SIP mode of investment when they decide to get started on their investment journey. SIPs are designed with a singular purpose of making your investments affordable and easier to frequently maintain. Though some people tend to stop their SIPs after sometime and while the Asset management companies will let you take a break from your SIP, one must wonder if it is the right move or not!

Should SIPs be given a pause?

Who wants to lose money and especially the money that is hard earned and would have been safer if saved in banks! This thought is the main reason why people stop their SIPs in Equity or Mutual Funds. The stock market experiences many ups and downs but usually, the market experiences the former and this is the time when stocks of major companies go up. If you decide to stop your SIPs then chances are you won’t be able to get the benefits of the equity or the mutual funds’ gains. These funds ensure that all the money that has been collected from investors is invested in good quality Stocks. The investment making company will deal with your investments and will invest it in the right stock which could offer you earn higher returns.  

Sometimes people wait for the market high to cool down a bit as some people believe that it is too good to be true. They stop their SIPs and resume them only when they think that the time is right for investing. But the thing about the market is that it can always go up a little further and the whole point of having a SIP is to stick around through thick and thin, letting the investment making company do their job. This will help you in many ways and when the time is right you will earn higher returns. But if you stop then you would miss out on an opportunity to make some good money which could prove crucial if you are planning on investing more and getting guidance from asset management companies. And if you still feel insecure then you should probably invest diversely in stocks as diversification lowers the risk of losing money.

Having a diversified investment portfolio always lowers the risk of the overall market investment. Consulting your wealth advisor is recommended before you decide to stop SIPs. The expert advisors will surely explain the importance of diversified investment portfolio and ensure that you think all pros and cons through before stopping your SIPs.

How to continue your SIP after major investment?

Investments are big these days and investing in a house of your own is always a good idea. But this can lead to the closing of your SIPs and depending on your situation it could either be a good thing or a bad thing. Many people sacrifice a lot to afford the home which they always dreamed of and this dream does not come cheap. The money that is required for such a home is a lot and stopping your SIPs might seem like a good choice but once you retire, you might stop earning regular money and have only your investments to rely on.

This is one of the major reasons why it is never advisable to stop your SIPs for achieving your long-term or short-term goals. But if you still have to save money then instead of stopping your SIPs altogether you can cut the amount a little and then slowly increase the amount every year. You can also consult an expert wealth management advisors and get all the information you need to grow and manage your assets as you see fit.

It might take some time before you start to earn higher returns but that doesn’t mean that you have to close your SIPs or take a break from them. If you think about it then in a way you are actually saving and making a lot of money at the same time. There might be some problems now and then but at the end, you will surely get good returns on your investments.