SIP now? But is investor confidence starting to waver? This is because the number of investors stopping their SIP has increased rapidly. Not only this, the pace of opening of new SIP accounts has also decreased. Data from the Association of Mutual Funds in India (AMFI) shows that 49 lakh new SIP accounts were opened in November. At the same time, 63.7 lakh new SIP accounts were opened in October. Thus, there was a big decline in opening of new SIP accounts in November as compared to October.
People closing SIP also increased rapidly
Additionally, the number of SIP closures or discontinuations increased to 39.14 lakh in November, from 38.8 lakh in the previous month. This took the SIP closure ratio to 79.12% in November, which is the highest after 88.38% in May. The SIP closure ratio in May 2020 was 80.69%.
Why are we getting disenchanted with SIP?
Stock market experts believe that this is mainly happening due to the ongoing fluctuations in the stock market. There have been big ups and downs in the market in the last one year. Due to this, investors have not got the desired returns. Due to this, new investors are avoiding entering the market in volatile times. Also, a large section of existing investors do not want to invest additional money through SIP until they get a clear signal from the market. Experts say that if this trend continues for a long time, volatility in the stock market may increase.
