All previous records of closing SIP accounts broken, why is this happening

With the decline in the stock market, there is a stampede among mutual fund investors as well. Even people are getting disillusioned with the mutual fund SIP, which was the favorite of the middle class. All previous records of closing SIP accounts were broken in the month of December. According to the report of Business Today, 45 lakh SIP accounts were terminated in the month of December. Which is an all-time high in a month.

Earlier in May 2024, 44 lakh SIP accounts were closed. This attitude of investors has worried the market giants. The concern of the stock market giants is that earlier SIP investors were not affected by the immediate ups and downs of the market and used to get good returns through long term investment. But this attitude of creating wealth through long term investment is coming to an end among SIP investors.

SIP accounts are not only being closed, but there is also a decrease in the opening of new SIP accounts. Only 9 lakh SIP accounts were opened in December, which was the lowest in the last seven months. SIP investors look at the returns in long term compounding of their investments based on the value of the rupee. Despite this, the decrease in account opening is worrying.

Financial market experts say that carelessness or lack of understanding in choosing an investment product sometimes leads to a loss-making deal. This happens especially with those who are new to the financial market. A stock market expert said that SIP investors choose funds based on recent performance and year-round returns.

Short-term outperformance and underperformance keep coming and going. Sometimes even funds with good track records fall below their benchmarks due to changes in market conditions or management strategy. Therefore, investors should think calmly in such a situation. Because, SIP mutual funds in India are still in a strong position and are giving good returns in the long term.