You have not grasped the basic concept of SIP. The idea is to average your price over a business cycle, in stead of trying to time the market. People who advised you to invest in equity or equity related MF, perhaps forgot to tell you that you should be in it for long, i.e. be an investor, not a specualtor. So trying to judge the performance of the SIP over one year is rather naive. One business cycle in India should be at least 4.5 years, and that is a reasonable time frame to evaluate equity investments, and more so an SIP.
RE:Why an SIP is not always great
by sanjay gohil on Jun 23, 2008 10:33 PM Permalink
Dear Mr. D,
I am absolutely in favour of SIP. The perfect answer for your discussion was given by Harish and Subir. No one can time the market. Just think that what would happen if you had invested your 60,000 rs. in one shot in month if January this year when even expert are talking about sensex will go up to 25000 mark. SIP is for those people who wants to go slow and steady. It is not a way to make fast buck.If some one have that much ability to time the market then he should directly invest in to equity instead of taking a route of mutual fund.
