Indian The stock market has fallen more than 10 percent from its all-time high. Due to this, retail investors have suffered a loss of billions of rupees. This market crash has scared a large number of retail investors who no longer want to continue with their investments. Key index Nifty has fallen more than 10 per cent from its all-time high of 26,277. While the Sensex has fallen more than 8,500 points from its peak. However, it is not yet a bear market. When the market falls 20 percent from its high, it is considered a bear market. But the suffering of retail investors remains enormous.
There are many confusions in the minds of investors.
Some retail investors believe it is better to wait until the market reaches its correct valuation, rather than continue investing. Investors have many questions on their minds right now. Should they wait until the market reaches its correct valuation? Why invest when the market continually falls? More disadvantages are likely to arise, so why not wait a little longer? There may be some truth in these things, but only for lump sum investors and not for SIP investors. Let’s explain how.
Should SIP be stopped?
When investors buy mutual fund units during a falling market, the average price of their mutual fund units goes down, increasing their chances of earning more profits during a rising market. Additionally, when you purchase units across all market cycles, the total cost is averaged. That means you don’t have to wait for the “right” price to invest in mutual funds. The essence is to keep buying at regular intervals.
Market decline is good for buying
Apart from this, buying is considered good when the market is falling. Instead of stopping SIPs, investors should take advantage of the market decline and use it as an opportunity to buy more. SIP contributions reached an all-time high of Rs 25,322.74 crore in October 2024. While in September it was Rs 24,508.73 crore. A year ago, SIP contributions in October 2023 stood at Rs 16,928 crore, indicating a growth of 49.6 percent in a year between October 2023 and October 2024. The number of SIP accounts reached a high historical of 10,12,34,212 in October 2024. While in September 2024 it was 9,87,44,171.
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