Many of us invest in mutual funds through systematic investment plans (SIPs), but how many of us invest for the long term? And what is long-term really? For the last couple of years, the Indian mutual funds industry has collectively started advocating SIPs. Sceptics even doubted if SIPs work.
In April 2016, Mint partnered with Hexagon Wealth, a Bengaluru-based boutique wealth management firm, to check if SIPs work at all.
We had taken three time periods; 5 years, 7 years and 10 years. Using a set of 15 equity mutual fund schemes, the study had set out to see how many schemes gave negative returns, returns up to 6%, between 6-15% and greater than 15%.
Further, the study also showed the percentage of times funds gave returns in excess of inflation. The study demonstrated the merits of long-term investment. See it here: bit.ly/2lvDJOx.
This year, we decided to dig a little deeper. We wanted to find out how long should you invest in an SIP.
