Common Mistakes People Make While Selecting The Best Mutual Fund For Long Term SIP Investment

Best Mutual Fund for Long Term SIP Investment

SIP is a systematic investment plan is a tool that allows an investor to invest a small amount of money in mutual funds at regular intervals to create wealth creation. It is always better to make a long term investment i.e longer time period and lesser installment amount to gain maximum returns. Thus if you have selected a 5 year SIP plan it does not mean guaranteed returns. 

Here are a few common mistakes people make while opting for the best mutual fund plan for long term SIP investment. 

Investing a high investment amount

While you are trying to assess your present financial situation, you should also not fail to keep a check on the future financial situation. One should always opt for moderate to low investment option while opting for longer tenures.

Stop SIP when the market has fallen

 An SIP investment is termed to be market risk-free; however it is not entirely true. The finance market often goes through ups and downs and this is what concerns a lot of investors. The fear due to instability in the market makes the investors to stop their SIP investment. One should not panic in such situations as the finance market takes months to stabilize thus one should buy more SIPS’ when the price in the market has fallen.

Forget after making an investment

An investor often neglects to keep a check on the SIP’s. The key here is to access your investment portfolio regularly. Sell off the units which are not making profits and buy new ones. Especially when one makes a long term investment the investor should make sure they carry out regular checks. 

Selecting dividend over growth

An investor always withdraws the dividend in short term profits. However, if you opting for the best mutual fund plan for long term SIP investment make sure you keep on investing in the dividend stocks again and again to gain best returns on your investment. 

A long term investment is thus driven by the power of consistency and timely lumpsump investment which help create a better mutual fund investment portfolio at the same time derive maximum returns with lower risk.

However, at first it can be difficult for any investor to choose the best mutual fund plan for long term SIP investment. All they need to do is select any one of the mutual fund schemes and the SIP will be put in place for them.