5 Common SIP Mistakes To Avoid in 2024

Discovering the potential of Systematic Investment Plans (SIPs) is a wise financial move, yet it requires careful consideration to gain financial growth from your SIP investments. As we step into 2024, it is crucial to be aware of common mistakes that may hinder your SIP investments. This article highlights the 5 common SIP investment mistakes you must avoid in the coming year for a more robust and successful investment strategy.

Read more

SIP Insurance Plan Benefits
Start SIP with as low as ₹1000
Start SIP with as low as ₹1000
No hidden charges
No hidden charges
Save upto ₹46,800 in Tax
Save upto ₹46,800 in Taxunder section 80C^
Zero LTCG Tax
Zero LTCG Tax
Disciplined & worry-free investing
Disciplined & worry-free investing

  • Insurance Companies
  • Mutual Funds
Returns
Fund Name 3 Years 5 Years 10 Years
Virtue II PNB Metlife 17.59% 26.28%
17.97%
View Plan
Pure Equity Birla Sun Life 16.46% 22.3%
16.37%
View Plan
Large Cap Equity Fund Tata AIA 15.6% 22.37%
16.08%
View Plan
Pure Stock Fund Bajaj Allianz 16.09% 21.14%
15.63%
View Plan
Grow Money Plus Fund Bharti AXA 12.28% 19.29%
15.52%
View Plan
Diversified Equity Fund HDFC Standard 12.23% 18.23%
14.75%
View Plan
Growth Super Fund Max Life 11.9% 17.66%
13.67%
View Plan
Equity Fund SBI 12.46% 17.13%
13.21%
View Plan
Bluechip Fund ICICI Prudential 10.9% 16.61%
12.33%
View Plan
Growth Plus Fund Canara HSBC Oriental Bank 10.71% 14.33%
11.37%
View Plan

Updated as of Oct 2024

Compare more funds

  Returns
Fund Name 3 Years 5 Years 10 Years
Active Fund QUANT 24.92% 31.48%
21.87%
Flexi Cap Fund PARAG PARIKH 20.69% 26.41%
19.28%
Large and Mid-Cap Fund EDELWEISS 22.34% 24.29%
17.94%
Equity Opportunities Fund KOTAK 24.64% 25.01%
19.45%
Large and Midcap Fund MIRAE ASSET 19.74% 24.32%
22.50%
Flexi Cap Fund PGIM INDIA 14.75% 23.39%
-
Flexi Cap Fund DSP 18.41% 22.33%
16.91%
Emerging Equities Fund CANARA ROBECO 20.05% 21.80%
15.92%
Focused fund SUNDARAM 18.27% 18.22%
16.55%

Updated as of Oct 2024

Compare more funds

What is SIP Investment?

SIP, or Systematic Investment Plan, is a disciplined and hassle-free way to invest in market-linked funds. The best SIP plans involve regularly investing a fixed amount at predetermined intervals. You get the benefit of the power of compounding. This helps you to navigate market volatility by spreading investments over time. 

SIPs promote financial discipline and allow you to participate in the capital markets. Investing a small amount of money regularly helps to fulfil your long-term financial goals.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Common SIP Investment Mistakes to Avoid in 2024

Investing in the best SIP plans for 5 years can be a fantastic way to build wealth over time. However, even with a great strategy, mistakes can happen. Here are 5 common SIP blunders to avoid in 2024:

  1. Timing Troubles:

    Mistake: Jumping in and out based on market fluctuations. Various research underscores the futility of predicting market fluctuations accurately.

    Fix: Stay committed to your SIP regardless of short-term market ups and downs. Focus on consistent investments, leveraging the power of compounding over the long term.

  2. Ignoring Diversification:

    Mistake: Concentrating investments in a single asset class or fund exposes investors to higher risks. Neglecting portfolio diversification can result in losses during market downturns.

    Fix: Diversify your SIP portfolio across various sectors and asset classes to reduce risk and enhance long-term growth potential. This will help you to get a well-rounded and resilient portfolio.

  3. Chasing Short-Term Gains:

    Mistake: Blindly choosing the SIP plans for quick profits can lead you to chase short-term gains, often at the expense of long-term stability.

    Fix: Focus on the long-term objectives of your SIP investments. Avoid making impulsive decisions based on short-term market fluctuations. Patience is key in reaping the rewards of compounding.

  4. Overlooking Your Risk Tolerance:

    Mistake: Opting for aggressive or conservative funds without considering your risk appetite. When you invest without assessing your risk tolerance, it becomes a recipe for financial stress or missed opportunities.

    Fix: Assess your risk tolerance and choose funds that align with your comfort level to ensure a balanced and sustainable investment approach. 

    People Also Read: SIP Calculator

  5. Neglecting Regular Review:

    Mistake: Concentrating investments in a single asset class or fund exposes investors to higher risks. Neglecting portfolio diversification can result in losses during market downturns. 

    Fix: Regularly review your investment portfolio and adjust your SIP contributions based on changes in your financial goals, market conditions, and overall performance.

Summing It Up

Staying away from top SIP investment mistakes is crucial for maximising returns and achieving financial goals in 2024. By avoiding these five mistakes, you can foster a disciplined and informed approach, ensuring a more secure and prosperous investment journey. Stay vigilant, stay informed, and let prudence guide your SIP investment decisions for a successful financial future.

FAQ's

  • What are the common mistakes in SIP?

    Here are some of the most common mistakes people make when investing in SIPs:
    • Not having a clear goal or investment horizon

    • Investing too little or too much

    • Panicking during market downturns

    • Not diversifying your portfolio

    • Not reviewing your SIPs regularly

  • What is very high risk in SIP?

    Very high risk in SIP, in general, represents SIPs with high volatility and potential for significant losses.
  • Is there any risk of losing money in SIP?

    Yes, there is a risk of losing money in SIPs. Here is why SIP investments can be high-risk investments: 
    • Market volatility

    • Portfolio underperformance

    • Short-term perspective

    • Risk of incurring losses in the short term

  • How do you break a SIP before maturity?

    There are actually two ways to "break" a SIP before maturity, depending on what you mean:
    • Cancelling the SIP: This stops future installments from being deducted from your bank account.

    • Redeeming your SIP investment: This involves selling all or some of the units you've accumulated through the SIP back to the mutual fund^^.

Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

SIP plans articles

Recent Articles
Popular Articles
Best SIP for 30 Years in India in 2024

26 Sep 2024

Planning for the future requires smart investment decisions, and
Read more
Smart SIP Tips - How To Get Better Returns with Your SIPs?

10 Sep 2024

‘Slow and steady wins the race’… Steady is the important
Read more
Daily SIP vs Monthly SIP

10 Sep 2024

SIP stands for Systematic Investment Plan. It's a method of
Read more
Why You Should Increase SIP Amount With Increase in Your Salary

17 Jun 2024

As you earn more, it is smart to put some of that extra money to
Read more
Right Time to Start Investing in Lumpsum and SIP

17 Jun 2024

Deciding when to start investing can be tricky, especially when
Read more
SIP Calculator
  • 10 Apr 2018
  • 446349
Policybazaar’s SIP Calculator allows you to calculate the corpus you can accumulate on your investments.
Read more
Best SIP Plan for 5 Years
  • 15 Apr 2020
  • 115095
SIPs are a great way of investing in mutual funds^^ for both long and short terms. It helps inculcate an
Read more
SIP Investment Plans - Best SIP Funds to Invest in India
  • 01 Feb 2017
  • 1044053
A Systematic Investment Plan (SIP) is a smart and easy way to invest in market-linked funds. It allows you to
Read more
Best SIP Plans
  • 14 Feb 2020
  • 133725
Best SIP Plans to Invest in India in 2024 Investing in market-linked assets can be done in two ways: through the
Read more
SIP 1000 per month
  • 18 Feb 2022
  • 43497
Systematic Investment Plans (SIPs) have emerged as a popular and disciplined way for investors to build wealth
Read more

Invest ₹10K/Month & Get ₹1 Crore# on Maturity
*under 10(10D)
top
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL