- by Soumili Roy
- 27th Aug 2020
Should I continue with my SIP in the current market?
Apparently it is not considered a not so great strategy to base your investment conclusions on the prevailing market conditions. It is not possible to accurately foresee the market movements. Countless studies have similarly evidently proven that timing the market (or buying when the market is low and selling when it is high) is nearly impossible for an investor to do over a long period. That is one reason why most investment specialists ask investors to invest a minute sum regularly irrespective of the market conditions so as to form wealth over a long period. The rationale behind investing via a systematic Investment plan in fact is similar. You might as well invest regularly over a long period to achieve your goal since it is not possible to buy and sell stocks (or any asset) at the right time. Hence, you would invest a fixed amount regularly in a certain asset class over a certain period to achieve your financial goal.
You are giving up a chance to create wealth when you try to stop or pause your investments or abandon your investments. Apparently as an epitome, a volatile or bad market phase is when there is a sale happening in the market – which is, the stocks are available at a cheaper price. Also, what shall happen if you stop your investments during such a phase. You will, nevertheless, lose an opportunity to buy stocks cheap and let go of a chance to maximise wealth and money.
An individual, like you, should never forget that the market may go through various phases depending on the economic or other factors. Nonetheless, we cannot predict the outcome of these situations transparently and align your investments accordingly. What we can do is to make sure your personal finances are in order. Make sure that you, as an individual, have a contingency fund in place, a life and health insurance cover for you and your family. Only if certain things like these are taken care of, one must stick to the investment plan. That is the only way to achieve your financial goals.
